KANSAS CITY ZEPHYRS BASEBALL CLUB: A BASEBALL ACCOUNTING DISPUTE. This case is used to illustrate some basic accounting issues in a. Describes a dispute between the owners of the major league baseball teams and the players’ union about the profitability of the baseball teams. The issue is. Kansas City Zephyrs Baseball Club, Inc. case study. Krishna G. Palepu. Save; Share. Save; Share.

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Business and Environment Business History Entrepreneurship. The deferred salaries expense should be taken out of current expenses and put on the balance sheet as a liability if there is no separate fund.

Since the players that are released have the possibility of getting signed-on with another team who would take over the contract zephyrss does not seem to expense the full amount in one period. Hi, I am Sara from Studymoose Hi there, would you like to get such a paper?

However, since net operating losses are allowed to be carried forward 20 years by the IRS, Zephyrs managers may be able to extend the theme of no profit through off-setting future profit with prior year losses with their accounting methods in and If you need this or any other sample, we can send it to you via email.

It was also brought up that some companies put aside this money and others do not.

Kansas City Zephyrs Baseball Club Essay

Students are asked to resolve these disagreements and determine the team’s “true” profitability. We use cookies to give you the best experience possible. Cite View Details Educators Related. Considering the facts it does not add value to depreciate teams that generally appreciate and therefore should not be included in the financials.


The only Way to keep these expenses would inf.2006 be to carry high player turnover on the teams which is not beneficial in an operational standpoint. Cite View Details Educators Purchase. The three causes of disputes are roster depreciation, overstated player salary expense, and related party transactions. Palepu and Joseph P. Your Answer is very helpful for Us Thank you a lot! Palepu and Sarah Gulick Keywords: The issue is important because of the ongoing collective bargaining negotiations.

According to the players there is an appreciation rather than depreciation as vaseball players actually improve their skills as they increase in experience. Since the sign-up bonus is a cost incurred by the owners in one payment it should be expensed in basebalo year in which it was incurred. The discussion reveals the tensions in performance measurement and illustrates the fundamental issues in accrual accounting.

Although, both teams seem to agree on most of the financial statements there seem to be three specific areas that are causing dispute.

Kansas City Zephyrs Baseball Club Essay Example for Free

In reviewing the Kansas City Zephyrs Baseball Club, and hearing arguments from both the owners and player there have been some interesting findings. Palepu and Sarah Gulick.

About the Author Krishna G. There would be no way to arbitrate stadium and broadcast charges based on unique situations and contracts. Kansas City Zephyrs Baseball Club. Palepu, and Sarah Gulick. If you contact us after hours, we’ll get back to you in 24 baesball or less. Dey, Aiyesha, Krishna G.

Kansas City Zephyrs Baseball Club, Inc.

This clearly shows that the owners are trying to cover as much profit without actual cash outflow through the depreciation expense.

Describes a dispute between the owners of the major league baseball teams and the players’ union about the profitability of the baseball teams. Using different accounting techniques resulted in two very different financial statements for the Kansas City Zephyrs Baseball Club. If there is a separate fund this can be put on the balance sheet as a other asset till they are expensed in the year they knc.2006 a current payable.


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Palepu and Sarah Mehta. Finance General Management Marketing. Considering the fact that Kansas City Zephyrs Baseball Club is expensing everything ahead of time it is important to note that they will not have these costs to offset profit from future years. If all the targets were achieved, Tesla would be one of the most valuable companies in the world, and Musk would receive the highest compensation of any CEO in US corporate history. The stadium costs would stay the same. There are three points of disagreement on player salary expenses; sign up bonuses, deferred compensation, and non-roster player salaries should be expensed in the year that it is paid.

As a result it seems more based on opinion than hard fact. The case is best used as an introductory case in a course on financial reporting or performance measurement. This seems inconsistent with their prior argument to have the financials match cash flow as much as possible with an argument against depreciation.

Palepu, and Anthony K. How about receiving a customized one?