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DAILY NEWSLETTER FROM CASCAIS - STARTS JULY 1st
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OLYMPIC EQUIPMENT COST
For Olympic sailors, the cost of equipment is a fraction of the costs for coaching, accommodation, travel, local transportation, food, coach boats, equipment
shipping, insurance, etc.
However, when ISAF decides the Equipment for the Olympics, the cost of
equipment is considered, not the cost of coaching.
CREDIBILITY GAP
ISAF’s reports on Olympic equipment costs do
not adhere to any accepted accounting practice; nor have they been vetted by
any internal or independent external review.
ISAF's reports have been based simply on retail 'sticker price', which has no
credibility in any serious business context.
RESPONSIBLE REPORTING
Any responsible cost model includes:
| > |
Purchase price |
> |
Usage and maintenance costs |
| > |
Re-sale value |
> |
In-direct costs |
| > |
Competitive lifespan (at ISAF Graded Event levels) |
This presents total cost of ownership, which is well established in international accounting
practices.
The following simple example includes just Price and Re-Sale value:
| |
Price |
Graded Event
Lifespan |
60% Re-Sale
Value |
| Boat "A" |
€15000 |
2 yrs |
€9000 |
| Boat "B" |
€20000 |
4 yrs |
€12000 |
| Boat "C" |
€25000 |
8 yrs |
€15000 |
Boat "A" is the most expensive boat. Its
straight line depreciation is €2500/yr vs. €2000/yr for Boat "B" vs.
€1250/yr for Boat "C"
After 8 years, a sailor of:
- Boat "A" has bought and sold 4 boats, and spent €24000
- Boat "B" has bought and sold 2 boats, and spent €16000
- Boat "C" has bought and sold 1 boats, and spent €10000
In Olympic campaigns, short lifespan boats are expensive
and can undermine the fairness of competition.
Sailors without the money to buy replacement equipment frequently are at a disadvantage.
There are many sailors and coaches who can attest to this reality.
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TOTAL COST OF OWNERSHIP MODEL - BOAT "A"
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| Costs |
Y1&Y2 |
Y3&Y4 |
Y5&Y6 |
Y7&Y8 |
EXIT |
| Retail Price |
15,000 |
15,000 |
15,000 |
15,000 |
- |
| Usage/Maint |
5,000 |
5,000 |
5,000 |
5,000 |
- |
| In-direct |
1,000 |
1,000 |
1,000 |
1,000 |
- |
| Total |
21,000 |
21,000 |
21,000 |
21,000 |
- |
| Cumulative |
21,000 |
42,000 |
63,000 |
84,000 |
84,000 |
| Re-sale |
|
|
|
|
|
| Total |
0 |
9,000 |
9,000 |
9,000 |
9,000 |
| Cumulative |
0 |
9,000 |
18,000 |
27,000 |
36,000 |
| Cash Flow |
|
|
|
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| Net |
(21,000) |
(12,000) |
(12,000) |
(12,000) |
9,000 |
| Cumulative |
(21,000) |
(33,000) |
(45,000) |
(57,000) |
(48,000) |
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TOTAL COST OF OWNERSHIP MODEL - BOAT "B"
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| Costs |
Y1&Y2 |
Y3&Y4 |
Y5&Y6 |
Y7&Y8 |
EXIT |
| Retail Price |
20,000 |
0 |
20,000 |
0 |
- |
| Usage/Maint |
5,000 |
5,000 |
5,000 |
5,000 |
- |
| In-direct |
1,000 |
1,000 |
1,000 |
1,000 |
- |
| Total |
26,000 |
6,000 |
6,000 |
6,000 |
- |
| Cumulative |
26,000 |
32,000 |
58,000 |
64,000 |
64,000 |
| Re-sale |
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| Total |
0 |
0 |
12,000 |
0 |
12,000 |
| Cumulative |
0 |
0 |
12,000 |
0 |
24,000 |
| Cash Flow |
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| Net |
(26,000) |
(6,000) |
(6,000) |
(11,000) |
12,000 |
| Cumulative |
(26,000) |
(32,000) |
(46,000) |
(52,000) |
(40,000) |
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TOTAL COST OF OWNERSHIP MODEL - BOAT "C"
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| Costs |
Y1&Y2 |
Y3&Y4 |
Y5&Y6 |
Y7&Y8 |
EXIT |
| Retail Price |
25,000 |
0 |
0,000 |
0 |
- |
| Usage/Maint |
5,000 |
5,000 |
5,000 |
5,000 |
- |
| In-direct |
1,000 |
1,000 |
1,000 |
1,000 |
- |
| Total |
31,000 |
6,000 |
6,000 |
6,000 |
- |
| Cumulative |
31,000 |
37,000 |
43,000 |
49,000 |
49,000 |
| Re-sale |
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| Total |
0 |
0 |
0 |
0 |
15,000 |
| Cumulative |
0 |
0 |
0 |
0 |
15,000 |
| Cash Flow |
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| Net |
(31,000) |
(6,000) |
(6,000) |
(6,000) |
15,000 |
| Cumulative |
(31,000) |
(37,000) |
(43,000) |
(49,000) |
(34,000) |
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