I just want to welcome people to OER's School of Accounting - Class is currently in session 
Thank you
So many questions... as I said I don't really want to go into or bore people with all the techo accounting things
But I will try and keep it simple
First principle in accounting Debits must equal Credits.
As I've said a couple of times cash and profit are 2 separate things
Finally - the Club is bound by LAW to follow accounting standards. Whether we think the standards make any sense is not relevant. Under Corp Law in this country the Club must follow these standards. I've got very annoyed over the years when it has been suggested the club has included JDF donations as revenue to boost its bottom line when legally the club must do it
I wasn't aware the land is crown land. Does anyone know the duration and terms of the lease?
The land is owned by the MElb City Council who lease to the the Richmond Cricket Club who sub lease it the RFC. My understanding is the lease between the Council, Cricket Club & the Footy Club run con-currently until 2022 or somewhere around there.
I'd like to know how and why buildings on Crown Land is considered an asset since its not owned and cannot be onsold by the lease holder.
It can be on sold to the land owner if we were to move as the land owner (Council) would want the the buildings as it is classed a community facility.
Because we are using the CASH to pay for the redevelopment. One asset goes down (cash) because it is being used to pay for the construction of the new buildings (Property)
I understand that part. But I cant understand why the difference? What is the difference based on?
It's because assets can either appreciate, or increase in value, or they depreciate. That's where the difference comes in.
You are sort of right al, assets certainly can depreciate and the Club is legally bound to depreciate all its assets over a period of time. Depreciation is a great example of a expense being incurred but having no affect on cash = a non cash transaction that impacts on profit
As for assets appreciating - this is usually done via a directors revaluation of assets and if this to happen it must be declared in the accounts.
I understand that part. But I cant understand why the difference? What is the difference based on?
Ok. So for accounting purpose we are appreciating the value of our Property, Plant & Equipments 2010.
Is that what you are saying? And we are appreciating at a greater value than the physical cash we are spending on it?
No
The other key document that needs to be considered here is the Statement of Cash Flow as that shows where all the money has come from and where it has gone
But what you need to remember is that Cash is made of two components the Cash held for the re-development and cash held for normal trading. The Balance sheet combines the 2 amounts to give one figure (under acctg standards that is all the club as to do).
We would have paid from the redvelopment cash account the costs associated with the buildings and the buildings would be recored at their "fair value" which is usually the cost.
All other payments come from our trade account. The Cash Flow clearly shows that from normal opertaing (trading) activities we have generated an increase in our cash levels by nearly $600k
On top of that we have rec'd another $1.6mil in grants.
Simply in the course of the year we generated $2.214 in cash and paid out $9.038 in cash resulting in a net decrease in cash held of $6.824 mil
