Castle more than doubled its shareholders' funds by an upward revaluation of its audio copyrights by pounds 9m even though three other accounting changes depressed its asset values.
That move blows a hole in one of the main financial measurements of a company's health - gearing. Castle's borrowings are now 48 per cent of shareholders' funds , against 99 per cent without the copyright revaluation.
Such is the division between the positions that the accounting profession is coming under increasing pressure to make a clear-cut decision on asset valuations.
Manchester United does not value its players in the balance sheet, but Tottenham Hotspur, its quoted premier league rival, does. If United were to adopt that policy, it would boost its shareholders' funds by pounds 24m.
That figure, the company says, is worthless. United argues that players' perceived value is often subject to erratic movements - swayed either way by a club's success or by injury.
If United were to change tack, its profit-and-loss account would take on a starkly different appearance. A player's value would have to be depreciated annually through the account, causing confusion when comparing the company's financial performance from one year to the next.
A simple hypothetical pounds 1m transfer deal clearly highlights the danger of carrying player valuations on balance sheet. Assuming an expected five-year term at the club would result in pounds 200,000 of annual depreciation.
That works fine if the player stays for five years. However, the problems arise if he is, say, sold after three years. If he realises less than the pounds 400,000 in the balance sheet, then the company will show an exceptional loss. Conversely, if he realises more there will be an exceptional gain.
The arguments for the accounting treatment adopted by companies like Castle, although different, carry similar inherent dangers. Castle justifies the valuation of its copyrights on the grounds that it can identify earnings streams attributable to them.
While that is true, it cannot be sure of the size of those streams in the future, particularly during a world recession. Castle, after all, gleans a large part of its turnover overseas.Reuse content