The FIFA Football World Cup is over for another four years. In some teams, a new generation of players made their mark. In others, the old guard stood firm. For both, performances on the world stage may fuel transfers between clubs, with huge amounts of money at stake. But how are players’ values determined? And are approaches to valuing younger players different to those with longer track records?
Sport is big business. And like any big business, accounting and valuation issues are important. But apart from the money that changes hands, why is the valuation of football players important? The answer is simple: players can be a football club’s most valuable asset. A club may need to determine a transaction price if they wish to buy or sell a player. Also in the context of lending, collateralization or insurance. Or in relation to impairment tests or over-indebtedness. Whatever the cause, players can have a considerable financial and balance sheet impact.