Levitt Report - NHL.com

SCHEDULE III - PLAYER COSTSUNIFIED REPORT OF OPERATIONSREPORTING INSTRUCTIONSIt is important that this section exclude non-player related costs (e.g., bonuses paidto coaches & trainers, locker room personnel, etc.)A. Major League Player CostsAccounting Principles -For financial statement purposes and/or taxation purposes, each Club mayrecognize certain player compensation (such as signing bonuses, deferredcompensation, etc.) using different accounting principles. For example, oneTeam may recognize a player's signing bonus on a cash basis, whereas anotherTeam may recognize this over the term of the player contract. For purposes ofthe URO the following Accounting Principles must be used unless reporting itdifferently would not result in a material difference.Base Salary - line 1Report the base amount paid to the player in the year.Signing Bonuses - lines 2 & 3Signing bonuses must be capitalized and amortized over the term of the contract,excluding the option year. If a player is traded, then the unamortized amount ofthe signing bonus must be expensed in the year the player is traded or assignedto the new players being picked up in the trade so long as equal asset value isreceived and the amortization term is not extended. Signing bonuses paid torookies and paid for by the NHL Club should be reported here under the sameprinciple noted above.If a signing bonus is deferred, then the present value of the total signing bonus(discounted at your Club’s incremental borrowing rate) and amortized over thefixed term of the contract must be reported here. The related interestcomponent must be reported on Schedule I, Section H, line 14(a).Contract/Performance Bonuses - line 4Both Team and individual performance bonuses must be recognized in theseason the bonus is earned.NHL Awards - line 5Report player NHL Awards/Pool paid by the League as collectively agreed withthe NHLPA in the "Playoffs" column. Report the same amount as a credit on line14 of Schedule IV in the "Playoffs" column. This amount should agree to thefigures reported in Appendix B.URO Instructions – September 2003 3512/18/2003 10:50 AM