IFRS 15 — Presentation of player transfer payments

Date recorded:

Agenda Paper 6


The Committee received a submission about whether a football club transferring a player to another club recognises the transfer payment received as revenue applying IFRS 15, or instead recognises the gain or loss in profit or loss applying IAS 38. The player is registered in an electronic transfer system managed by a third party. Registration means that the player is unable to play for another football club.

Staff analysis

The staff analysed that on employing and registering a player, the entity (Selling Club) has an intangible asset because it is an identifiable non-monetary asset without physical substance. The asset could bring future economic benefits to the entity and is controlled by the registering club because the registering right enables the entity to restrict another club's access to the economic benefits arising from the player's performance. Therefore, the player transfer payment is treated as derecognition of an intangible asset as per IAS 38.

On the other hand, the registration right could meet the definition of inventory if (a) the club expects to develop and transfer the player before the end of the employment contract, and (b) the development and transfer of players is part of the ordinary activities of the club. Accordingly, the related player transfer payment is recognised as revenue under IFRS 15.

The submitter and some outreach respondents indicate that Selling Club may be able to transfer the registration right to inventory at the time of transferring the player to another club and, thus, recognise the transfer payment received as revenue applying IFRS 15, based on the analogy to IAS 16:68A. The staff disagree and consider IAS 16:68A is not analogous to this circumstance and it is designed for a specific situation.

Staff recommendation

The staff did not recommend to add the matter to the Committee's standard-setting agenda but publish an agenda decision.


Some Committee members agreed with the staff analysis but some of them considered that the analysis of the presentation within the cash flow statement is not necessary in the tentative agenda decision. A few Committee members struggled with the inventory accounting and noted that practically speaking there is no line item called "payment for person inventory" presented on the statement of financial position. The Chair responded that in some occasions the ordinary course of business of the football club is to develop the players and then to sell its right to a third party. Some Committee members indicated that this is only applicable when the costs to develop the players are capitalised, but the way of measuring the cost of players is another issue. A Committee member suggested to add in the tentative agenda decision wording from the definition of inventory, specifically: "when an entity plans to use an asset in its operations for a period of time and then sell that asset, it would not classify the asset as inventory when it initially acquires the asset" and "if an asset is in the process of development for sale in the ordinary course of business, it would meet the definition of inventory".

Another Committee member had concerns on transferring the asset from IAS 38 to IAS 2 and questioned whether there is any legitimate change in use of the asset to evidence the transfer. The change in use of the asset should also consider the different nature of the asset.

Another Committee member expressed her view to stress the importance of disclosure of accounting policies in the financial statements and the Chair agreed.

The Committee decided, by a majority of votes, not to add the matter to the standard-setting and to publish a tentative agenda decision subject to the above suggestions from Committee members.

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