8. Goodwill
The group companies included in the consolidated financial statements as from the
financial year 1996/1997 are:
- Teucrus B.V.: intermediate holding company (participation 100%).
- Football Merchandising and Promotion Zuid Oost B.V.: merchandising activities
(participation 100%).
- Tekmessa B.V.: exploitation of image rights of players (participation 100%).
- Exekias B.V.: running of the Ajax museum (participation 100%).
- Eurysakes B.V.: conducting of Internet and mail order activities (participation 100%).
4. General accounting principles
Unless otherwise indicated, assets and liabilities are stated at historical cost, and are
reported in thousands of guilders. All assets and liabilities are valued at nominal value,
unless otherwise indicated.
Revenues and costs are attributed to the year to which they relate.
5. Foreign currencies
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 loss account.
6. Income taxes
Taxation on profits is determined on the basis of the result according to the profit and
loss account, the current tax rates and allowing for permanent differences between the
result according to the profit and loss account and the fiscal result. Deferred tax assets
and liabilities resulting from temporary differences between the commercial and fiscal
capital are stated in the balance sheet under 'Deferred taxation'. The current tax liability is
stated under 'Taxation and social security contributions'.
Until June 30, 1994 the Association was not liable to corporation tax. The fiscal opening
balance sheet was drawn up as at July 1, 1994, on which agreement was reached with the
tax authorities.
The advantage of the higher fiscal valuation of the transfer and signing on fees and
tangible fixed assets and the relating deferred tax asset is included in equity as at July 1,
1994.
Deferred tax assets and liabilities are stated at their nominal value based on the current
tax rates.
7. Transfer and signing on fees
Transfer and signing on fees and related costs regarding players' contracts for which there
are binding agreements have been capitalised as 'transfer and signing on fees' at a
maximum of the expense to third parties, less depreciation on a straight-line basis.
'Transfer and signing on fees' are depreciated over the duration of the contract. The
duration of the contracts is generally between 1 and 5 years. As at the balance sheet date,
all contracts are assessed by the management for permanent impairment. The risk of
unforeseen reductions in the value are not covered by insurance agreements.
The remaining capitalised 'transfer and signing on fees' for terminated players' contracts
are charged to the profit loss account in the same period as in which sales revenues are
recognised.
Reimbursements for continuation of a contract are assessed in the same way as the
consideration for transfers and signing on.
The excess of the acquisition cost of subsidiaries and associated companies over the net
asset values of the Company's share in their net assets as at the dates of acquisition
constitutes goodwill. This goodwill is depreciated on a straight-line basis over 5 years.
9. Intangible fixed assets
