Brentford FC has submitted its accounts for the year ended 30 June 2017.
Brentford FC has submitted its statutory accounts for the 2016/17 season. The document has been lodged at Companies House, and can be downloaded here. The accounts have been prepared using accounting standard FRS 102.
The previous financial year (15/16) was the first time that the club’s accounts had been prepared using this new accounting standard. The key change is in relation to the treatment of loans made to Brentford FC by Matthew Benham. The accounting standard requires that the accounts show interest that would have been charged if the loans had been made by a commercial institution (e.g. a bank). In fact, no actual interest was charged by Matthew on his loans and these were purely accounting entries.
The changes also led to a reduction in the long term loan value on the balance sheet, with a corresponding increase in retained earnings through a “capital contribution”. Again, no payments were involved; these were purely accounting entries.
In the year to 30 June 2017, a re-allocation of loans between Matthew, Brentford FC and Lionel Road Developments Ltd (LRD) occurred so that Matthew now makes loans directly to LRD. An amount owed by LRD to BFC is now shown as an amount owed to Matthew, which means that part of the loan previously shown between Matthew and BFC was effectively passed on to LRD. There were no actual cash transactions undertaken as a result of this re-organisation of part of Matthew’s loans.
This reduced the Group’s long term loan balance as the LRD loans are “current liabilities”. As such, part of the balance which was a “capital contribution” in the previous accounts was reversed as a “capital redistribution” in retained earnings as no interest is chargeable on a current liability under FRS 102. Again, this is purely an accounting entry as no money changed hands.
The remaining loans to BFC have been renegotiated so they are re-payable on a rolling 367 day period. This means that no interest under FRS 102 will be charged to the P&L, as can be seen in 2016/17, and this will continue until such time as the loans are repaid.