Kansas City Zephyr

622 Words Aug 22nd, 2011 3 Pages
Focus of the Class: Accounting reports are often used in contracting. In this situation, baseball team owners and the players differ on the financial results of operations. An arbitrator has to decide which income number best represents a team's financial performance for the purpose of arbitration.

Questions:

1. Who do you think is correct about the true profitability of Kansas City Zephyrs – the owners or the players? a. both are correct on different issues and there is one issue that is undecided because the facts are not there 2. What is your recommendation regarding the particular accounting disagreements between the owners and the players? b. see below 3. Looking ahead to the sale of the luxury boxes,
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good scouting, marketing contracts, and good performance increase the roster value. In contrast, injuries and retirements decrease the value because the list of names of the players is constantly changing. Also the team revenues are influenced by the performance of their players, as better the team is playing more fans come to the games. * player salary expense * deferred portion of total compensation * OPC - book the whole amount of salary now even though paid out for some players over 10 years * PBPA - only book what is paid out * side with PBPA - there is no cash out so it should not be booked this year * amortization of bonuses * OPC - none * PBPA - amortization of bonuses because it is just part of the compensation expense *