UK Impairment under FRS 102- effect on value of fixed tangible assets?

Sep 9, 2019
Reaction score
United Kingdom
This one will probably be nice and easy for the experienced accountants on here- I however am not one. ;)

If an asset impaired- say a football stadium, and I've touched upon this elsewhere but it intrigues me, but impaired on relegation and a takeover- does that broadly reflect the fair market value for the foreseeable?

Aston Villa on relegation impaired Villa Park to the tune of £44,593,000- this was in 2015/16 and also in the midst of or ahead of a takeover. I think that one of the reasons for the Impairment was to make it easier to sell, the club I mean. The owner got £30m in addition to the original £60m sale price once they were promoted back to the PL in May 2019.

I was always under the impression that once an asset impaired, ie written down, that it would broadly reflect the Fair Value or Value In Use- whichever of these was greater and this would be the Recoverable value.


Sometime in 2015/16, this was Impaired.

£106,763,000 at 1st June 2015.


Accumulated- £21,476,000
Annual Charge for the Year- £1,817,000



The new net book value is/was £39,180,000 as of 31 May 2016.

Included within the above- ie the Freehold Land and Buildings- was Freehold land that was non-depreciable presumably, certainly did not depreciate but to the tune of £7,931,526- as it was the prior season.

If we include that land within the value of Villa Park then it's £39,180,000 post impairment, if we don't then it'd be £31,248,474.

Presumably the relegation will have had an effect, but it still seems fairly unorthodox? I'd argue it's up for debate as to whether a relegation would affect remaining worth that drastically!

Yet, in May 2019- a few days before promotion, the ground was sold to their owners or a company controlled by their owners- actually it was an existing company within the group structure for £56.7m! Bit interesting?? Profit on remaining book value around £28-28.5m- if valued at say Depreciated Replacement Cost then I struggle to see it!

Depreciated by a further £1,454,000 in 2016/17- no additions.
Made Additions of £2,533,000 in 2017/18- but also seemed to dispose of Land worth £1,505,000- that would be linked to the HS2 compensation.
The Remaining Additions are or were equal exactly to the increase in the non-depreciable Freehold Land- £1,028,000.
Annual Depreciation Charge was £1,446,000 but £174,000 was eliminated on disposals.

I suppose my question then is, how do you write back on that much Impairment based on what was a 50/50 chance of promotion- ie a playoff final v Derby!

How do we justify it?

EDIT: Was also worth nothing that on acquisition by Lerner in 2006/07 there was a fair value adjustment upwards, but none by Xia in 2015/16 or 2016/17.



VIP Member
Jan 6, 2013
Reaction score
United Kingdom
Have you got any links to the accounts that you're talking about? It's often the notes to them that provide the explanation, or at least the basis to go on, rather just raw numbers. Can have a look at them with you.


Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads