11-30-2004, 11:14 PM
Hi PRO CREATER
In some cases human can be an asset. Few month ago Manchester United (Football club) and Rooney (football player) singed and agreement for five years. Manchester United paid him in millions and Rooney will play for the club. Now Rooney will appear as an asset in balance sheet of Manchester United or we can say Rooney is Asset for Manchester United.
Definition of Asset
Assets are right or other access to future economic benefit as a result of past transaction.
According to above definition Rooney is an Asset because -
1) Right to future economic benefit...Rooney will play football for Manchester United and club will earn the revenue
2) Because of past transaction...Rooney paid (purchased) some time in past.
Here we assume that Manchester United signed Rooney for five years and paid him five millions. Now Manchester United cant put five million as an expense because five millions have been paid for five years therefore Rooney will appear as an asset. Not just the Rooney but also all top football players are asset for the club.
Depreciation
Because Rooney has been paid for five years (Asset) therefore five million will be expanded on to five years. Depreciation will be charged on the length of agreement not the age of Rooney. I think straight-line method will be used for the depreciation therefore depreciation charge will be 1 million per years (5 million over 5 years).
In the cause of Rooneyâs death during the agreement period he will be treated same as other assets (disposal).
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In some cases human can be an asset. Few month ago Manchester United (Football club) and Rooney (football player) singed and agreement for five years. Manchester United paid him in millions and Rooney will play for the club. Now Rooney will appear as an asset in balance sheet of Manchester United or we can say Rooney is Asset for Manchester United.
Definition of Asset
Assets are right or other access to future economic benefit as a result of past transaction.
According to above definition Rooney is an Asset because -
1) Right to future economic benefit...Rooney will play football for Manchester United and club will earn the revenue
2) Because of past transaction...Rooney paid (purchased) some time in past.
Here we assume that Manchester United signed Rooney for five years and paid him five millions. Now Manchester United cant put five million as an expense because five millions have been paid for five years therefore Rooney will appear as an asset. Not just the Rooney but also all top football players are asset for the club.
Depreciation
Because Rooney has been paid for five years (Asset) therefore five million will be expanded on to five years. Depreciation will be charged on the length of agreement not the age of Rooney. I think straight-line method will be used for the depreciation therefore depreciation charge will be 1 million per years (5 million over 5 years).
In the cause of Rooneyâs death during the agreement period he will be treated same as other assets (disposal).
<i></i><i></i><i></i><i></i><i></i><i></i>