How are Accounting Principles affecting the professional sports industry?
The professional sports industry is not immune to the unique challenges that come into play with the application of accounting principles and tax regulations. Teams and leagues have always struggled with accurately apportioning revenue, and optimizing franchise ownership structure.
Are country clubs cutting their overhead costs?
Weaver said golf courses and country clubs have reined in overhead costs nicely, cutting them since 2010 by about 3 percentage points. “Those overhead costs are ongoing costs that aren’t direct labor or materials, so it’s showing these country clubs and golf courses are able to carefully manage spending.”
What's happening to golf courses'financial health?
Another positive trend is that debt-service coverage and liquidity ratios for golf courses and country clubs, on average, have improved since 2011, indicating overall financial health has been stable, according to data from Sageworks.
Why are so many golf courses closing each year?
And while some courses are seeing stronger memberships and rounds played, some industry experts told Bloomberg they expect course closings to continue to outnumber openings by about 100 a year for the foreseeable future, especially given a generational shift and declining interest even among baby boomer players.
Can you deduct golf costs on your taxes?
Therefore, if you take a client out for a round of golf, you cannot deduct the cost of that round in your business for tax purposes.
Is golf a tax deductible activity?
Golf is considered a recreational activity and therefore the expenses related to that activity are not tax deductible. As the entertainment of key clients, suppliers and employees is becoming such an important aspect of doing business, an informal war has developed between taxpayers and the CRA concerning what is considered an acceptable deduction ...
How long is the recovery period for golf course?
Qualifying land preparation costs associated with modern greens and other golf course components have a recovery period of 15 years.
Is sod expense depreciated?
If the land preparation costs being depreciated include the cost for sod, seed or soil, examiners should determine whether these items were previously deducted as operating expenses. If such expenses were previously deducted, they should not be included as part of the assets being depreciated.
How do sports teams generate revenue?
To do so, they incur millions of dollars in operating expenses staging events and transporting players from city to city for games.
When does revenue recognition go into effect?
Companies should be prepared to implement the FASB’s new revenue recognition model, which goes into effect for annual reporting periods beginning after December 15, 2017, for public entities, and after December 15, 2018, for non-public entities.
Is the sports industry immune to tax?
The professional sports industry is not immune to the unique challenges that come into play with the application of accounting principles and tax regulations. Teams and leagues have always struggled with accurately apportioning revenue, and optimizing franchise ownership structure.
Does a signing bonus have to be amortized?
Even if a player contract includes a signing bonus, if the bonus payments are deferred throughout the life of the contract, capitalization, and amortization does not occur until the payment is made.
Is an athlete's salary expensed?
Like those of other employees, the salaries of athletes are expensed when incurred.
