Got me thinking. Is it something like this? Someone with a better grasp can correct me.
2022: Buy for £20m on a 5 year contract. Immediate negative £20m on our books for this accounting year.
2023: Worth £16m (1 year down), but Rio are paying his wages so not costing us anything
2024: Worth £12m (2 years down), but Rio are paying his wages so not costing us anything
2025: Worth £8m (3 years down), but Rio are paying his wages so not costing us anything
2026: Worth £4m (4 years down), but Rio are paying his wages so not costing us anything. Now we sell him for £6m and book a £2m profit in this years accounts?
At the end of the day we've still spent £20m and received £6m back. So it's bad. But it at least helps with different accounting periods? i.e. maybe we didn't mind losing the £20m in 2022, and really needed the £2m profit in 2026?
(These are all totally fictious numbers of course just for discussion)