Loan repaid

[Fulham Fallout]

Yep repaid in full as well as interest to Wisdom Smart. Well done Mr Patel

Huh?  It was owed by Wisdom Smart, not to Wisdom Smart!

The amount owed was deducted from the purchase price so that the repayment shows as “revenue” for FFP purposes due to it being a write back of the previous bad debt provision in the accounts

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But do they have the financial qualifications? Eh?

Would you like to explain the financial implications of the loan being repaid?

I did post about this scenario (Patel takes on the debt and repays it) and why he’d do that, in the takeover thread.

Hurry up  

The answer is, because this Lon was previously written off in the Albion books and that amount was a charged to the profit & loss account.  That then had a bearing on FFP figures. 

This repayment not only adds a few million to the bank account, but the amount received will be credited to the profit and loss account.  This will therefore reduce our FFP losses by the same amount.

Not quite 100% correct as the loan was never written off.  It was merely fully provided for in the accounts as a doubtful debt.  It never ceased to be owed. 

For FFP purposes it’s the equivalent of selling an Academy player for £5m but without actually losing a player.

The difference between a provision and a write off.  I think some of of our #financial experts should stick to the #head chef threads.

Funny you say that, as I am going to go back and look at the last balance sheet to see if the loan was still in it or not. 

Whether the loan was or wasn’t in the last balance sheet, the net result to the P&L and FFP are identical. 

The chef is currently cooking dinner and will revert.