Under P&S rules, Championship clubs are permitted to lose a maximum of £39m over a rolling three-year period.
Albion have been closely monitored by the EFL after their losses increased by £23.4m during the 2023-24 accounting period, the first without parachute payments since relegation from the Premier League in 2021.
And although the club has posted a combined loss of £55.6m since July 2022, the figure is considerably lower for P&S purposes because spending on infrastructure, their academy and the women’s team is exempt from calculations.
It is around these so called “in-kind” deductions that Albion are basing their objection to the decision – specifically their charity partner The Albion Foundation – claiming the metaphorical goalposts surrounding the issue have been moved.
“Proceedings were brought by the CFRU (Club Financial Reporting Unit) following a change in the CFRU’s approach to community development expenditure,” the club statement added.
“In 2023-24, the CFRU accepted the club was entitled to include in-kind donations of the club’s facilities, staff time and resources to its official charity partner, The Albion Foundation, in its P&S calculation.
“Earlier this year, the CFRU informed the club that it had changed its approach and imposed a retrospective adjustment to the club’s P&S calculation.
“Without the CFRU changing its approach to the community development expenditure, the club would not have breached the P&S rules.”
The club added it was “considering its options” in terms of a potential appeal.