KANSAS CITY ZEPHYRS BASEBALL CLUB INC. In this case we have a typical issue related with different accounting approaches analyzing expenses generated and paid in different periods. We have the position of the Owner-Player Committee (OPC) representing the owners who obviously want to present low profitability in their financial statements to get a better treatment for taxes and in the other side we have the position of the Professional Baseball Players Association (PBPA), the organization representing
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Kansas City Zephyrs Baseball Club, Inc. This case helps demonstrate how different accounting techniques can come to different results. In this case I believe the owners of the team were not being completely honest in the way they were allocating expenses and therefore indicating losses instead of profits. There are three areas that the players association did not agree with the expenses allocated by the owners of the team. These areas are the Roster depreciation, the player’s compensation and
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Kansas City Zephyrs Baseball Club, Inc. Case Study Antecedents: the Professional Baseball Players Association (PBPA) and the Owner-Player Committee (OPC) were engaged in a collective bargaining dispute where the PBPA believes they should share in the teams' profits. The OPC maintains, however, that the teams were losing money each year. Both sides had independent meetings with an arbitrator to evaluate and recommend a viable decision ”Who is right?” The case illustrate major areas in which
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periodic net income numbers if the clubs can always be sold for huge profits? How should Bill Ahern resolve the accounting conflict between the owners and players? How much did the Kansas City Zephyrs Baseball Club earn in 1983 and 1984? Facts This case shows that how different accounting methods can lead a company to different positions. That is what Bill Ahern was selected on April 9 to focus on reviewing the finances of the Kansas City Zephyrs Baseball Club, Inc., which was bought on November
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Case Analysis 10-3 Kansas City Zephyrs Baseball Club, Inc. I.Issues Why does net income not equal cash flows? Why do we need accrual accounting? (Why do not we fire all accountants and just publish summary bank statements) Why do the differences between owners’, players’, GAAP and truth number exist?(Can accounting numbers be neutral representations of what happened? What happens if a retired non-roster player (e.g. Joe Portocararo) returns to the active roster while continuing to earn the same
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Kansas City Zephyrs Baseball Club, Inc. Answer and submit these two questions for each item in dispute: Who's correct and why? for the Kansas City Zephyrs (6 points). In this baseball accounting dispute case I would rule towards the side of the players. First and foremost, their case on roster depreciation is a good point, because one, this is not done in any other industry when referring to staff or labor, and from a performance standpoint the way you may be able to determine if depreciation
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In the case study of the Kansas City Zephyrs Baseball Club, Inc. Bill Ahern the arbitrator was assigned to resolve the issue on the parties’ agreeing on the true profitability of the major league baseball teams. Both Zephyr’s owners and players disagree on three different areas: a) Roster depreciation, b) Overstated Player Salary Expense which entails current signing bonuses, roster salary, amortization of and non-roster guaranteed contract expense; and c) Related-Party Transactions (Stadium Operations)
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Kansas City Zephyrs Baseball Club, Inc. 2006 Evaluation of the five (5) items of dispute between Professional Baseball Players Association (PBPA) and the Owner-Player Committee (OPC) 1- Roster Depreciation – The OPC is currently depreciating 50% of the purchase price over the period of six years, where the PBPA feels that the depreciation expense should be recognized at the time of the team being sold. So who’s right? I feel that the OPC is right not because they are following industry standard
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Katelynn Tax 1/18/16 Kansas City Zephyrs Baseball Club, Inc. 2006 There are five main points of difference between the accounting methods of players and owners. The five main differences appear in roster depreciation, current roster salary, amortization of signing bonuses, non-roster guaranteed contract expense, and stadium operations. The following paragraphs analysis the main points above. Owners take 50% of purchase price of $228 million and depreciate it for 6 years this amounts to $19,000
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Applying Accounting Principal to the Kansas City Zephrys Baseball Club Case Measurement Positions Roaster Depreciation Measurement Issues Player Compensation Stadium Expense 1. Owners’ Accounting The accounting follows the industry standard of accounting principles within the baseball field in essence the owners get to write off the declining market value of the player contracts as a loss while also counting the annual salaries paid the players as an expense. The financial statement account
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