Give an Example of an Asset That Is Not Recorded on a...

Word Count: 990 Give an example of an asset that is not recorded on a balance sheet, and critically evaluate why it is not, before developing an argument for the inclusion of the asset. Whether or not certain assets and liabilities should be placed on a balance sheet is a much talked about subject. The accounting equation, Assets – Liabilities = Ownership Interest, represents the balance sheet; which is produced each year in a Public Limited Company’s financial statement; which can be viewed by the public. I will use this essay to discuss why the asset of a ‘home-grown’ football player, a player who signs as a trainee with a professional club under the age of 16, is not included in the balance sheet of the company. According to†¦show more content†¦This topic has been thoroughly assessed to try and include such an asset on a balance sheet of a football club. A University of Leeds lecturer, Dr. Gerrard carried out some academic research into the topic and created a formula which ‘takes into account players ages, experience, international recognition, goal-scoring ability and the size and status of the club’ (University of Leeds, 2002) to try and enable the players’ skill to be seen on a balance sheet. This is also very important to a club, as they want to show all of their assets to potential investors; in a time where more and more clubs are falling into administration. In my opinion, the players of a football club are its biggest asset. The consumers of the service provided by the entity are the fans; and I am sure the majority would tell you the names they sing on the terraces are the biggest asset of the club. Again, take David Beckham as an example. 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