No, you're saying that hypothetically, the club would have remained within budgets for the years in question had they known that this would blow up in the future. My point was that they have paid the players in this way and that the resultant tax liabilities have to be paid and mean that for the years in question we have effectively probably made losses.

That's exactly what I'm saying. I'm talking hard facts, not hypotheticals

I think that's exactly the point he is talking about. Have the financial statements been/will they be restated to reflect the fact that we may have effectively made losses for those years now?

Doubtful, but it will be interesting to see how the 'lump sum' is treated in this years accounts.

Why doubtful?

Pointless exercise, mainly. As long as everything is sorted and paid up I don't see a need for any previous set of accounts to be altered.

I can think of two possible reasons. 1) For consistency, previous years may be restated for the comparative liabilities. 2) As I alluded to in a previous post, it may be more efficient for corporation tax to restate every year rather than just write the loss this year back as far as possible or carry it forward.

Can't find anywhere that states accounts would have to be amended. Not saying you don't, mind.

I'm not saying they have to be, just wondering if there's a possibility it might be beneficial to.

In what respect? Corporation tax? It all goes to the same guy, I'm sure all that was taken into account in the settlement. Seems the logical thing to do.

Its not a case of what you would LIKE to do - it is what you are REQUIRED to do that matters. You are only allowed to restate prior year accounts for two reasons:



1 - Change of accounting policy

2 - Correction of fundamental error



Normally, if one or the other applied and the affect was very material, you would have no choice BUT to restate.



I suggest the EBT settlement is neither of these. It arose from a major error of judgment by the then-directors. There MAY be an argument that it was a fundamental error, but I'd not buy that.

Cheers, I'm a little rusty on the rules for restatement. I knew there was a requirement for a change of accounting policy, wasn't sure if there was a similar one for a change of legislation/accounting treatment rules, which it may come under.