Case Analysis 10-3 Kansas City Zephyrs Baseball Club, Inc. Essay

Why? Owners suggest that the total future value of these payments should be expensed when the players are removed from the roster. Players suggest that the payments should be expensed as they are made. However per the rules of conservatism, the combined non-roster salaries should be expensed in 1984 and the salaries to be paid out in ‘85 and ‘86 should be listed as a liabilities on the Balance Sheet.

Imagine a darkened evening in the spring the lights are slowly warming up to illuminate the field in which the cleats of the great will graze the grass and scuff up the freshly dragged dirt. The crowd is feeling anxiety to know if the umpire is going to call the pitch a ball or a strike. This is in the mind of every person that comes out to support their local major league baseball team. In recent decades the sport of baseball has become criticized for the amount of money that the owners pay their players for their services. The question On the minds of not only the general public, but to the owners and the fans is the salary paid to the players. Major League baseball players are paid too much.

Collusion in baseball has been referred in the past as a “gentleman's agreement”. At the end of the baseball season in 1918, in an effort to keep the player salaries low, the owners released all players from the contracts (especially the non-guaranteed contracts). There was

According to statistics about twenty percent of the players in the MLB are from the Dominican Republic, even though thousands of young players stride to play for professional teams ( Pelotero, Finkel, Paley and Martin). The MLB believes they can find cheap players in the Dominican Republic and still create

Despite the distribution of this income from moneymaking activity to the individual teams, the league office’s revenue in 2012 was $255MM, which derived from annual dues and assessments. Each NFL team pays approximately $6MM in annual dues to the league office, which supports the operations and salaries of the league office. The additional assessments are repayments from the teams for loans from the league office. Despite this revenue, the league actually shows a net operating loss of $77MM in 2012. The majority of their expenses came from salaries, interest expense and “club related financing”, which was the source of these assessments.

The MLB believes they can find cheap players in the Dominican Republic and still create revenue. Unlike the majority of young players from the United States, these young men from the Dominican Republic are willing to take small signing bonus because they come from a poverty stricken country. Often, MLB teams are able to sign two or three Dominican players for the same salary as one American players. Even though the MLB is not equitable in their signing agreements, and does not pay them according to their worth, many of these players, see their lower salaries and playing opportunities with the same excitement and enthusiasm as their American

Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities besides preparing financial statements and recording business transactions. These activities include computing costs and efficiency gains from new technologies, participating in strategies for mergers and acquisitions, quality management, developing and using information systems to track financial

A third debate arises from the fact that some players no longer on the current roster are being paid amounts that were previously guaranteed in multi-year contracts because of they are retired or injured. The issue is whether the payments should be expensed as they are paid out or whether the total future value of these payments should be expensed when the players are removed from the roster. Owners asseverate that the total future value of these payments should be expensed when the players are removed from the roster because they are no more active players, hence they do not affect company’s current revenues. However, players want to persuade them the payments should be expensed as they are made. If it is not, income numbers would be heavily subject to high volatility depending on when they are released and on the duration of the contracts. Additionally, players say, these contracts could be picked up by another team as well, and then the company would not have to pay any liability. Reasonably,

Another type of bonus that is accounted in the salary cap is the bonus for offseason workouts. Mandatory participation cannot be required, so teams offer large bonuses for players who participate regularly. If the players participate for a certain amount, then they can receive the bonus. At the start of the 2013 league year, the NFL implemented a cap fee of $504,000 for minimum workouts in addition to the contracted bonuses. This means that $504,000 would be subtracted from the team salary cap. If the players do not earn the total of this amount due to nonparticipation, then each team will receive a

Major-League Baseball teams have large differences in payrolls. While there are teams that have payrolls of over 200 million like the Dodgers and Yankees, there are also teams who have less than 50 million like the Marlins and the Astros. The differences in payroll cause blood to boil between teams

The salary cap prevents the wasting and frivolous spending of money. The Detroit Tigers star third baseman, Miguel Cabrera signed a 300 million dollar contract for the next 10 years (Pagels). His contract is for $30 million until he is 41 years old. While he is at the top of his game right now, it is unlikely that he will continue to perform

Why do the differences between owners’, players’, GAAP and truth number exist?(Can accounting numbers be neutral representations of what happened?

Historically ,it is seen that there are numerous number of disputes in the field of financial reporting among different professionals, regulators and theoretitions .most of these disputes are related to the valuation of financial reporting components.the current curve in the progress of valuation is the push for and against the fair value approach.the purpose of this research is to examine the arguments on the use of fair value accounting and to identify the issues related to implementation of fair value accounting standards. Further, the results of literature related to role of fair value accounting within financial crisis are also investigated.

principles (GAAP), which apply to fi nancial accounting and are considered to be the “best”

There have been many debates in previous decades amongst the investors, users of the financial statements, on whether fair value accounting is worth being used. According to IFRS 13, fair value is “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”. Usage of fair value has advantages, however, it has disadvantages as well. This essay will discuss how fair value is more advantageous than disadvantageous and how it is carried out. It will also examine how fair value led Lehman Brothers, an American investment bank, into bankruptcy during the global financial crisis and why the trend of fair value has emerged in the recent decades.