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As the author of many books and articles on management and accounting, he spoke with The Slovenia Times about the current accounting challenges for Slovenian businesses. He relates it to football and its global dimension, which he perceives as a great case of a perfect competition.

We often see multiple interpretations of accounting statements, partly due to European and Anglo-Saxon accounting principles. What, in practice, are the main differences and how to cope with them?
The concepts are very different; the Statement of Financial Position made according to the Anglo-Saxon model has always been more optimistic, however the European model (also German) that includes Slovenia, is based on the principal of caution and is more conservative. Due to European integration, International European Accounting Standards have been created which are similar to the Anglo-Saxon model that exhibits higher assets, recognises revenue at transaction rather than payment and so show shareholders the expectations.
A good example for comparison in practice is the value of stock; if a company bought it for EUR 100 and the value today is EUR 120, the Anglo-Saxon accountant will record EUR 120. The German or European accountant will however say that until the stock is sold (for EUR 120), we will show it as EUR 100. The same applies for other assets such as real estate and other property.
Finally, we usually hear that it is accountants that are guilty for the crisis however, I must disagree. The financial statements only summarise the business, but I can agree that the path that accounting has taken is certainly not good.

But still, the inflation of value was a significant contributor...
Definitely, expectations have only been increasing and consequently the demand for shares and real estate. These days, accounting has ignored its core principal, to be careful or that it is better to show less business than artificially inflate.

It is widely recognised that companies often ignore items that should be stated in the Statement of Financial Position. Do the International European Accounting Standers deal with this issue?
Unfortunately in Anglo-Saxon practice no, but we have gone against the trend that Member States return to their national accounting standards, so a step back. In addition, in the Annual Reports more and more attention is put on non-accounting factors and the business report where the strategies for the future are seen, people, brands and markets. On the other hand, the auditors are tightening their standards and so they take care that the Statement of Financial Position is not artificially inflated.
To mention a case in the US (as well in Slovenia) where companies were issuing many invoices at the end of the year (many times to their subsidiary companies) and the payment was never made and so to prevent such actions and fictional business, the greatest importance of the accounting is to report only realised rates.

In Slovenia, the value generated by an employee is high although we do not exploit it since we still have low added value and low prices for the products we sell.
In my opinion, this is a key problem of the Slovenia economy and the challenge for Slovenia managers. In terms of productivity, Slovenes are amongst the highest and even burn out, but when pricing the product the indicators for Slovenia are quite poor. Therefore, Slovenian companies needs to raise the question of how to make good products and sell them for a good price! This is through R&D, branding and niche products, properly supported by marketing.

But, on the other hand, do you think it is also an issue of the Slovenian country brand which has a low perception value that is not supportive for Slovenian managers. - Slovenian companies are usually sold for a low price and then sold again for much more...
Absolutely! I would highlight the question of whether Slovenia is making enough from being in the EU. The same situation is with Slovenian footballers; those from Slovenia have to put in more effort to take part with the international elite. From the perspective of self-confidence - Croatians are phenomenal! Slovenians are lack of the statement ship stance.

You used to say that football is a symbol of capitalism and the market economy. Why?
Football has all the characteristics of perfect competition. It is played at all levels; professional and recreational; any by every child worldwide. It is a global game, the players move from one country to another. Also, it is a huge industry, player transfers are worth as much as US$ 100m... The thing that fascinates me are the brands; you have a judge who is a brand, the ball is a brand, the stadiums and the players... and if I am from the generation that supports Union, today my child supports Liverpool - totally international and a different perspective.

What are the success factors for a brand?
To be seen and to be very good! In addition, you need to be attractive and have good communication skills - David Beckham and Ronaldo are great at this - the values and the way of life and the image in the local, as well as the international community. Are your stories, which are later supported by the sponsors, real?

UEFA President, Alexander Čeferin, opened the possibility that the Champions League Final could, in the future, take place outside the borders of Europe. What does this means in terms of sponsorship?
The main intention is the extension of the market and consequently that sponsors are willing to pay more for the greater visibility. For example, if the Champions League would go to China, Heineken would, for sure, be willing to support it since this is the way to approach new markets. And finally, UEFA also makes more money. The challenge for Mr Čeferin is that the best football clubs are the richest and only they wish to play together. On the other hand, the European mindset wants to give the opportunity for smaller clubs to also compete. It is interesting that China has set the goal that by 2050 it become world champion, and already today, they are investing into the football players which they want to see in their league.