Principal accounting policies
The formulated principles are applicable to the financial statements as a
whole, whereby they also apply to the consolidated financial statements
which form part of the financial statements.
AFC Ajax NV continued the activities of Vereniging Amsterdamsche
Footballclub Ajax', Amsterdam (hereinafter referred to as the Association).
The business of the Association was contributed to AFC Ajax NV, a public
limited liability company, with the exception of the KNVB licence. With
retroactive effect from January 1, 1998, the business has been conducted at
the risk and expense of AFC Ajax NV. The financial year according to the
articles of association runs from July 1 up to and including June 30.
The company's first financial statements are abbreviated financial statements
for the period from January 1, 1998 up to and including June 30, 1998.
To gain a better insight into the result for the entire football season we have
also included the figures for the period from July 1, 1997 up to and including
June 30, 1998. These figures are the pro forma figures of the Association for
the period from July 1, 1997 up to and including December 31, 1997, as
well as the companys figures for the period from January 1, 1998 up to and
including June 30, 1998. The comparative figures are last year's pro forma
figures of the Association for the period from July 1, 1996 up to and inclu
ding June 30, 1997.
The amounts concerning the six-month period started January 1, 1998 and
ended June 30, 1998 have been derived from the accounts of AFC Ajax NV.
The amounts for the six-month period started July 1, 1997 and ended
December 31, 1997 have been derived from the accounts of the
Association. The amounts in the consolidated financial statements for
1996/1997 have been derived from the adopted financial statements of
The figures derived from the Associations financial statements have been
adjusted as follows:
- The consideration for the players' transfer and signing on fees,
together with the associated costs of these contracts, have been capita
lised as from the date of the binding agreement as 'transfer and
signing on fees', shown at a maximum of the expense to third parties
less depreciation. Depreciation is calculated so as to write off the
expenditures in a straight line over the term of the player's contract.
In the financial statements of the Association, such consideration was
immediately charged to the profit and loss account. Moreover, in the
Association's financial statements, revenues and costs related to
transfers which took place immediately after the season and in the
new financial year, but before the release of the financial statements,
were incorporated into the financial statements of the previous
- In December 1997, the Tax Authorities announced that the
Association is liable for corporate income taxes as from July 11994.
In the profit and loss account of the Association, these taxes were
not accounted for. Futhermore, current and deferred tax liabilities
and deferred tax assets have been included in the balance sheet
- Based on information obtained after the financial statements of the
Association were adopted, some adjustments were made in the cal
culation of a number of provisions concerning the risks present as at
the balance sheet date.
According to the current regulations of the Dutch Football Association
(KNVB), licences to play in football competitions can only be granted to
associations and foundations.
The 'Bestuur Betaald Voetbal' (the KNVB professional football board) has
adopted a resolution entailing approval of the following structure:
The Association will hold the licence, while AFC Ajax NV will make its
means available to enable the Association to make use of the licence. All
possible profits and losses will be for the account and risk of AFC Ajax NV.
The consolidated financial statements include the financial information of
AFC Ajax NV and of the group companies in which AFC Ajax NV holds,
either directly or indirectly, more than half of the voting capital or in
which, by virtue of supplementary regulations, AFC Ajax NV has a decisive
say in matters relating to management and financial policy. The assets,
liabilities, results and cash flows of these companies are consolidated.
The group companies, all with seat in Amsterdam, included in the consoli
dated financial statements are:
- Teucrus BV: intermediate holding company (participation 100%)
- Football Merchandising Promotion Zuid Oost BV: merchandising
activities (participation 100%)
- Tekmessa BV: exploitation of image rights of players
- Exekias BV: running of the Ajax museum (participation 100%)
- Eurysakes BV: conducting of Internet and mail order activities
Balance sheet items in foreign currencies are translated at the market rate
as at the balance sheet date. Transactions expressed in foreign currencies are
converted at the relevant exchange rates as at the date of transaction.
Exchange differences are taken to the profit and loss account.