World cup affair spoils dfb’s balance sheet – big loss in 2017

World Cup affair spoils dfb's balance sheet - big loss in 2017

The affair surrounding the 2006 world cup has caused the german soccer association (DFB) to suffer a huge loss of image and additional tax payments, and now also a large balance sheet deficit.

The association posted a negative result of 20.3 million euros for fiscal year 2017, as DFB treasurer stephan osnabrugge reported at a press conference in frankfurt on friday. The main reason for this are the back payments to the frankfurt tax office in connection with the 2006 world cup affair.

Last october, the authorities issued retroactive tax assessments for the year 2006 and withdrew the DFB’s charitable status. According to its own information, the association had to pay a total of 22.57 million euros in arrears. "We have appealed these rulings. The appeals process is still ongoing. For us, however, this meant that we had to calculate the full contribution as an expense," osnabrugge explained. If the appeals process is successful, the DFB could theoretically retain the sum – with interest.

The revenues of the world’s largest sports federation had developed according to plan, in contrast to the expenditures, as the treasurer reported. According to the report, the DFB’s equity capital amounts to just over 155 million euros. "Despite these one-off effects, the DFB is economically sound, and we are of course in a position to meet our obligations at all times," the treasurer said. The 150 million euro academy in frankfurt is scheduled for completion by 2021. The association intends to pay for the half from its own funds.

In addition, the current assessment of several facts between 2012 and 2014 differs from the previous one. The auditing process, which according to department head accounting dirk moldenhauer has been going on for almost two years, is currently not complete. Further back tax payments are possible, the DFB has made provisions for this according to its own information. The amount involved is around 17 million euros, and the audit will cover banner advertising and sales taxes.

And 2018 and the following years will not be cheap for the DFB either. The historic first-round exit from the world cup in russia cost money; to win, the team had to reach at least the semifinals. "The tournament-related budget will show more expenses than income," osnabrugge calculated, without giving concrete figures.

The world cup affair has already been reflected in the past two balance sheets through clarification and legal charges. According to the DFB, it has invested more than seven million euros since 2015, including in the freshfields report, which was intended to help clarify the facts of the case.

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