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A Going Concern?


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Am I right in thinking that our auditors, over the last few years, have had to include a clause (for want of the correct terminology) in our accounts about DC being able to foot any losses for us to be classed as a going concern?

 

If so, given that DC hasn’t been able to pay wages in full, can they realistically include the same clause for the 20/21 accounts?

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9 minutes ago, WUGGAMONKEY1 said:

Am I right in thinking that our auditors, over the last few years, have had to include a clause (for want of the correct terminology) in our accounts about DC being able to foot any losses for us to be classed as a going concern?

 

If so, given that DC hasn’t been able to pay wages in full, can they realistically include the same clause for the 20/21 accounts?

He needs to demonstrate that he has the funds to keep the club going to the auditors otherwise they won't sign off the accounts (I will add this is whilst there is no income coming in or if we are making losses as we have in the past 4 years)

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5 minutes ago, BlueBloodedOwl said:

I think you answered your own question. On current evidence No and that's what the real worry is.

Maybe I have! I just wasn’t sure how it worked. I thought maybe, because losses are likely to be less due to the reduced wage bill, there was a way around it. 

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2 minutes ago, soldierboyblue said:

He needs to demonstrate that he has the funds to keep the club going to the auditors otherwise they won't sign off the accounts (I will add this is whilst there is no income coming in or if we are making losses as we have in the past 4 years)

Cheers. Does he have to provide proof of funds or something? Or is it less stringent than that? 

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Just now, WUGGAMONKEY1 said:

Cheers. Does he have to provide proof of funds or something? Or is it less stringent than that? 

Yes he will have to prove that he has the funds to cover the operating costs for the club - very stringent as I keep saying on here. If an auditor were to sign off the accounts and we went up the swanny the auditor(s) would have serious questions to answer and risk being struck off for life

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5 minutes ago, soldierboyblue said:

Yes he will have to prove that he has the funds to cover the operating costs for the club - very stringent as I keep saying on here. If an auditor were to sign off the accounts and we went up the swanny the auditor(s) would have serious questions to answer and risk being struck off for life

Thanks for your answer mate. Last question! Would proof of funds have to be cash? Or could you demonstrate proof of funds by the way of assets? Cheers 

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Just now, WUGGAMONKEY1 said:

Thanks for your answer mate. Last question! Would proof of funds have to be cash? Or could you demonstrate proof of funds by the way of assets? Cheers 

It can be a mixture of both - as we know there are lots of people who are asset rich (property and the like) but not cash rich.

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To quote the very apt Keats' The Eve of St Agnes;

 

"On a cold night in a medieval castle, a young lover breaks into his sweetheart’s chamber, hides in her closet, and then persuades her semi-conscious self to run away with him."

 

When the morning comes, we'll all be in love with Wednesday once more.  Keats knew.  You now know.  It'll be fine.

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All this is probably why Season Tickets aren't on sale – unlike the likes of Scunthorpe and Mansfield who are both selling tickets for 21/22. The Directors would guilty of wrongful trading if they sold tickets with insolvency a real threat. I don't buy the club's excuse of waiting to see how Covid restrictions play out...

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28 minutes ago, Sham67 said:

I can’t believe anyone thinks we will ‘sell’ any season tickets for next season.

We haven’t been a going concern since the late 90’s.

Wrong.

 

We have been a going concern long before DC took over. From 2010 to 2019 accounts, only in 2012 was we given a clean report. Every other year has been a going concern

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12 hours ago, soldierboyblue said:

Yes he will have to prove that he has the funds to cover the operating costs for the club - very stringent as I keep saying on here. If an auditor were to sign off the accounts and we went up the swanny the auditor(s) would have serious questions to answer and risk being struck off for life

Not only HMRC. The EFL also require stringent guarantees that clubs have finances in place to make sure they can fulfill all fixtures in a season

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