Bolton Wanderers' Financial Statement: An Accountant's View

Today's latest installment of the Bolton Wanderers financial saga makes for eye-opening reading, for even us non-finance professionals. For those unaware, these account details are available here.

But we wanted to get under the skin of what this news means, how important it is, and to put it into English so us mere mortals can understand what the situation is.

So with that in mind, we spoke to one of our accountant pals (who wishes to remain anonymous, but we'll call him Dave) to assess the Bolton Wanderers Financial Statements Year to Date 30th June 2015.

What do these tell us?

Well not a lot really, this is fairly historic financial information spanning the period 1 July 2014 to 30 June 2015, so as supporters it’s fair to say we’ve got a rough idea of what happened during this period.

The takeover was the most significant event and we all, again, have a rough idea on how that played out and the impact on the club itself. So numbers-wise this period was, in short, fairly bad. But as I said, we knew that was the case and were not going to be put off by that (new beginnings and all that).

Why did it take so long for them to be published?

For the uninitiated, a limited company in the UK has nine months to file their accounts to Companies House, giving the company enough time to produce its accounts and get them audited by an independent third party, in this case Deloitte LLP. The aforementioned have to provide an opinion on the financial statements so that mere mortals like you or I can gain assurance that the numbers give a fair reflection on what happened in the period. They also have to provide an opinion over the going concern status of the company.

This is key for BWFC, as in lay man’s terms going concern status essentially means that the auditors expect the company to run for the next 12 months (from June 2015, of course). But that 12-month period has elapsed now, I here you cry. This opinion should generally last for 12 months after sign off (which was 2 days ago), so in brief the club would state whether it can last longer than 12 months and the auditor will ‘audit’ this opinion to corroborate to the wider world that this is correct.

In this case, the auditor has issued a disclaimer of opinion meaning that they give no opinion on the financial statements. This rids them of any responsibility as they essentially say that they don’t believe that they have enough information to say that the accounts represent a true and fair view.

Why have the auditors issued this opinion?

The main reason why Deloitte has issued the opinion is due to the current disagreements between Ken Anderson and Dean Holdsworth over the controlling interests at the club. Although this came to a head post-year end, the auditors have a duty to report matters of this ilk until such time where the audit report is submitted, i.e. 2 days ago.

The details of the dispute over ownership is with regard to 10% of shareholding, which is part of a complex arrangement around loans that directly relate to a Blu Marble loan and a guarantee relating to it and would reduce Ken Anderson’s holding if it was to hold firm.

It would be assumed that the auditors could not get enough information relating to this dispute and, given that as discussed before, they have a duty to report until sign off, the subsequent events element of the financial statements could not be completed to it’s full extent.

What does this mean for BWFC?

As stated before the numbers are fairly historic and another set of financial statements will be due soon for the year to date 2016, so the financial health of the club is not a concern with this information. The more concerning part for the club is that the opinions provided by the auditors could affect EFL Financial Fair Play rules, which given the current transfer embargo will not help things. It also magnifies the current unrest in the background at the club.