Generally Accepted Accounting Principles

Posted on: June 4, 2022 at 00:21:36 CT

The Athletic Program has a number of specialized facilities that are essentially usualble only for intercollegiate sports: i.e. Memorial Stadium, the SEZ, Mizzou Areana, etc. Some of those failities cost roughly 100 million or more.

My recollection is Generally Accepted Accounting Principles requires a business firm to capitalize the cost of its physical facilities and then depreciate them over their useful life. The annual depreciastion is an expense.

If loaned funds are used to construct the facility (typically the case at Mizzou), a business firm treats the loan interest, etc. paid each year as a business expense. It appears to me the Tiger Athletic Department does neither.

If that is the case, an argument can be made that the Athletic Department's numbers understate the true cost of Tiger athltice programs.

I suspect these practices are not intentional, but merely practices that were first adopted in the distant past and have never been updated. However, from a business world perspective, it would seem they result in an understatement of the expenses of some intercollegiate sports.