Impression Management in Football Club Financial Reporting
The paper investigates the selection of accounting policies for intangible assets in the Italian football industry, focusing on the effects of the so-called salva calcio decree. Introduced by the Italian government, the decree effectively permitted clubs to amortize the asset of players?registration rights over an arbitrary time period of 10 years rather than over the length of players?contracts, thus improving clubs?reported financial position and performance. While adoption of the salva calcio decree had no direct cash flow effect, it had indirect economic consequences. It is argued that adoption of this policy by some Italian clubs was motivated by a form of legitimacy theory, whereby clubs sought to legitimize their financial position and performance with a view to meeting the licensing demands of football governing bodies. It also highlights the difficulty stakeholders face when trying to understand a football club’s financial results. Far from being neutral, figures in financial statements are value-laden.