Quote:No, he would have to capitalize it and depreciate it over the life of the asset.   So if the scoreboard is expected to last 20 years, and he spent 20 million dollars on it, he would expense about 1 to 2 million a year depending on what depreciation method he is allowed to use.   Depreciation can be complicated, but he would definitely not be allowed to expense it all in one year.  

 

The depreciation expense wouldn't be a lot of money compared to the team revenue and expenses.  It's not enough to couldn't cause them to run a loss. 

 

I know how depreciation works.  However, the Jaguars are not going to be depreciating assets that they don't own.  Like I said, perhaps they depreciate the portion they paid for.  The city paid for the bulk of the improvements.

 

You are also not taking into account accelerated depreciation methods that could possibly be used for something like a video board.  So if the Jaguars are depreciating this stuff, that doesn't necessarily mean they are using the straight-line method.  I mean, who knows what the useful life of a 100 ft video board is anyway?  It's definitely not "decades" like some here assume.  The only things that have that long of a useful life are houses and office buildings.

 

Fixtures (locker room) are generally 7-10 years, which WOULD result in pretty significant depreciation expenses no matter what method you use.

 

The swimming pools are probably 15 years.

 

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