Re: Maddest thing I've read on here
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Picking up on the “liabilities shot up…” point - and apologies for the boring accountancy post - when the Wimbledon money was received, the bookkeeping entry in the accounts would have been:
Debit cash (assets) : £1m (or whatever the actual amount was)
Credit deferred income (liabilities) : the same amount
Then over time this deferred income is gradually released to the profit and loss account and the accounting entry each year is:
Debit deferred income : £x
Credit profit & loss account : £x
So the liabilities will come down each year as some of the Wimbledon money is spent.
Hope that makes sense - basically the apparently high level of liabilities in the accounts is in itself nothing to be concerned about. (Though obviously there are many other issues to worry about.)
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