Mawande N

Accountant | Father | Son | Brother | Boyabenyathi

[Mashudu Modau @Mashstartup]

You have to give yourself endless opportunities to start again. To try again. To build again. Your dreams deserve the chance to live 🙏🏿

[Ajoje⚽⚖️ @israel_ajoje]

So rumours have it that United need to sell Onana for 18.9m to profit from his purchase. A lot of people think it’s a reporting error. But I tell you truly and surely that it in fact is not. It is actually accounting efficiency. Stay with me.

Under IAS 38, the International Accounting Standard governing intangible assets, transfer fees are not expensed in full in the year a club pays them. They are capitalised on the balance sheet and amortised, meaning spread evenly, across the full duration of the player's contract.

This is the accounting treatment that applies to all intangible assets with a finite useful life. A footballer's contract has a defined end date.

Therefore the fee paid to acquire that contract is written down gradually until it reaches zero at expiry- very similar to the system used for depreciation.

Are you with me?

Now, Onana joined Manchester United in July 2023 on a five year contract for £43.8 million. Under IAS 38, that fee is “amortised” at £8.76 million per year across five years.

By the summer of 2026, three years into that contract, United will have already expensed £26.28 million through their profit and loss account. The remaining book value of Onana on United's balance sheet at that point is approximately £17.52 million.

If United now sell him for £18.9 million, they are selling an asset currently sitting on their books at roughly £17.52 million for £18.9 million.

The difference between the book value and the sale price is the accounting profit. In this case approximately £1.38 million. Not £18.9 million in profit. Not a £25 million loss. A small but real accounting gain.

This is why clubs talk about profit on player sales as a separate line from the original transfer fee. The fee you paid years ago has already been absorbed into previous financial years through amortisation. 

It is also why sometimes, clubs sell homegrown players for “pure profit”. Homegrown players have a book value of 0 as their cost of purchase is 0 and every amount raked in from their sale is pure profit cos there is nothing to deduct from it.

 What matters at the point of sale is what the player is currently worth on your books versus what someone is willing to pay for him today.

Football finance is not intuitive. But once you understand amortisation, the numbers start making a different kind of sense.

I hope you learned something today.

My name is Ajoje. I am a FIFA Licensed Agent and International Sports Lawyer. I write on the Law and Business of Football, a lot. Repost and Follow if you want to read more posts like this.

[Bafana Bafana @BafanaBafana]

And so it ends!!!
We get our AFCON campaign off to a winning start. We march on!!

#BafanaPride

[FIFA World Cup @FIFAWorldCup]

🇿🇦 South Africa have qualified for #FIFAWorldCup 26!

#WeAre26

[SuperSport Rugby @SSRugby]

🏆 𝐓𝐈𝐓𝐋𝐄 𝐑𝐄𝐓𝐀𝐈𝐍𝐄𝐃 🏆

For the first time in history, the Springboks win back-to-back tournaments after one of the most entertaining editions ever 👏🇿🇦

#SSRugby | #TheRugbyChampionship

[Sky Sports Rugby Union @SkySportsRugby]

The Springboks inflict New Zealand's biggest-ever defeat 🤯

[Trev @Tokyo_Trev]

They have no idea that Bafana Bafana is winning it 😂

[Mawande N @wande_28]

@Holy__Bible1 God is good

[History ZAR @HistorySAZAR]

Henry Selby Msimang (1886-1982), the last founding father of the ANC, talks about the impact of the Natives Land Act of 1913. Point of correction, it is Plaatje, not Seme who is quoted to have said the words in this clip.

[SA Reserve Bank @SAReserveBank]

The MPC decided to reduce the policy rate by 25 basis points, with effect from 30 May.

[Justice Kekana @Justeasee]

@DeepHouseFrea I do installation of frameless shower glass, balustrades, mirrors,frameless stecking doors

[South African Government @GovernmentZA]

Congratulations Khosi Nation!✌🏽🏆

Kaizer Chiefs finally end their 10-year wait for silverware, defeating fierce rivals Orlando Pirates to lift the 2025 #NedbankCup !🏆

#GovZAUpdates #NedbankCupFinal2025

[𝓳𝓸𝓼𝓱🧸 @Joshwydd_]

giving visitors photo albums for entertainment 😂

[eNCA @eNCA]

[BREAKING NEWS] Fuel price decreases to take effect from Wednesday 2 October. 93 grade petrol to decrease by R1.06 per litre. 95 grade petrol to decrease by R1.14 per litre. Diesel to decrease by between R1.12 and R1.14 per litre. More details on #eNCA #DStv403 #QuestionThinkAct

[World Rugby @WorldRugby]

The Rugby Championship title is heading to South Africa! 🏆

The Springboks add another piece of silverware to their trophy cabinet 👏

[Mawande N @wande_28]

RT @IOL: The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) has decided to finally cut the interest rate. The repo rat…

[World Athletics @WorldAthletics]

THE SPRINT DOUBLE 😮‍💨

🇿🇦's 100m champ Bayanda Walaza flies to golden 200m glory in Lima🔥

#WorldAthleticsU20

[Ser OP @MorolongZA]

.it's what happens when you pin your entire business model on failures of government. The day this government fixes its problems, most companies are going to shut down.

[Manchester United @ManUtd]

Noussair is a Red! 🔴

Morocco international Noussair Mazraoui has completed a move from Bayern Munich to United 🙌

#MUFC

[Manchester United @ManUtd]

Welkom, Matthijs! 🤝

We are delighted to announce the signing of @MdeLigt_04 from Bayern Munich ✍️

#MUFC