Applying Accounting Principal to the Kansas City Zephrys Baseball Club Case
Measurement Positions Roaster Depreciation Measurement Issues Player Compensation Stadium Expense
1. Owners’ Accounting The accounting follows the industry standard of accounting principles within the baseball field in essence the owners get to write off the declining market value of the player contracts as a loss while also counting the annual salaries paid the players as an expense. The financial statement account for bonuses, deferred compensation, and non-roster guaranteed contract expenses even though some of the expenses are not paid immediately .Money is being listed when it is actually not paid out. Two of the shareholders are the owners that own the corporation that is used for the games. It is not stated whether the amount paid is fair market value or not.
2. Players’ Accounting This was deleted from the proposed player’s income statements. Per the players this only occurs when a team has been sold and in this case team was bought in 2003 and this should not continue to be factored in since the team is already 3years old. Also the players have highlighted that the skill of a player actually increases the in roaster value with gained experience Players added amortization bonus to reflect varied contract because there is no guarantee that the players will indeed complete their contract. Further players only receive 80% of their salaries so this was adjusted to accurately reflect what was paid out. Players accounting states and seeks to bring to light that the two shareholders are overpricing the amount the rental. This is inflating the amount and causing net loss to be reflected.
3. Economic Truth For both partied it is important to search for solutions find solutions that seek to strengthen their trust so that the resume of investments and economic processes can be