The situation
There’s more to the U.S. Olympic and Paralympic Committee (USOPC) and the Organizing Committee for the Olympic and Paralympic Games in Los Angeles (LA28) than sport itself. Both organizations are complex operations across finance, operations, marketing, ticketing, philanthropy, and so much more. The USOPC and LA28 are also not-for-profit organizations that do not receive government funding for their programs.
One way these organizations help fund operations includes entering into sponsorship agreements with third parties to allow the use of Team USA’s and LA28’s trademarks, logos, and brands. From the time Los Angeles was confirmed as the host city in 2017 to when the actual Games are held in 2028, LA28 will have grown from a handful of employees to thousands of employees across job functions, while also entering numerous operating facility leases and third-party vendor arrangements to host the Games.
As LA28 prepares its annual audited financial statements under United States Generally Accepted Accounting Principles (US GAAP), and given the nature and complexity of sponsorships, leases, and other activities with vendors, accounting for these arrangements under US GAAP can require significant judgments.
Growing from a startup to a thousand-plus person enterprise
The solve
As the Official Professional Services Provider of LA28, Deloitte developed a roadmap to help LA28 account for some of its most complex sponsorship and vendor arrangements under US GAAP. We leveraged experience from professionals in the sporting and live entertainment industry who serve both public and private organizations to provide informed accounting recommendations. Deloitte also brought in relevant accounting and reporting subject matter experts to advise LA28’s senior finance leaders directly.
Ultimately, the Deloitte team developed accounting models, illustrative use-case scenarios, and tailored position papers. We also established tailored contract review templates for LA28’s future application of accounting to new and modified sponsorship and lease arrangements. After helping LA28 understand the relevant accounting issues to form its accounting conclusions, Deloitte met with the organization in discussions with its independent auditor to assist in articulating its positions.
Building a roadmap to help with complex, technical accounting issues
The impact
LA28’s finance team now has a toolkit to manage some of the most complex technical accounting matters in its operations. The strategy and approach Deloitte helped them to establish provides a road map with real-world examples and use-case scenarios, so the team can better navigate areas of judgment in the application of US GAAP as the Olympic and Paralympic Games approach. This work not only helped demystify the complexity of the accounting literature but also provided recommendations that could lead to increased transparency for both internal and external financial reporting.
Do these challenges sound familiar?
