Actually many businesses do operate that way (spreading out costs over multiple years).
It's pretty common for a company to invest in an expensive piece of equipment and spread that cost over the expected life of the equipment.
And, in Minnesota at least, it's legal to do it that way for tax reporting.
For capital assets, yes, depreciation is often mandatory for financial accounting and tax purposes. States follow federal tax depreciation rules for the most part, save sometimes for bonus depreciation.
For the portion of Target Field that the Twins paid for, for instance, they would depreciate the structure over 39 years for tax, concessions equipment over 5 years, and so on. But teams do not treat players like capital assets, even though baseball contracts do have some characteristics of a capital investment. They treat payroll like . . . payroll. I don't know how else they could really do it, since it would be a pro forma method of accounting that they couldn't use for anything other than internal decision-making.
Major Leauge Ready, on 02 Nov 2016 - 9:59 PM, said:
You don't understand the definition of a sunk cost and neither do a number of people here who keep using it incorrectly.If there is still hope of a return it's not a sunk cost.
A simple google search contradicts you because you misunderstand "return." A sunk cost is one that has been incurred and cannot be recovered. The financial commitment to a player cannot be recovered financially - on-field production is irrelevant from that standpoint, though of course a team will want to keep productive players.
Edited by drivlikejehu, 02 November 2016 - 10:09 PM.