Everton have been referred to an independent commission by the Premier League over an alleged breach of financial fair play rules relating to the 2021/22 season.
Leeds United and Burnley raised issue with the Toffees' reported losses of £370million between 2018 and 2021 at the end of last season - far more than the £105m allowance over a three-year period.
A Premier League statement on Friday read: "In accordance with Premier League Rule W.82.1, the Premier League confirms that it has today referred an alleged breach of the League’s Profitability and Sustainability Rules by Everton Football Club to a Commission under Premier League Rule W.3.4. The assessment period for which it is alleged that the Club is in breach is the period ending Season 2021/22.
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"Commissions are independent of the Premier League and member clubs. The members of the Commission will be appointed by the independent Chair of the Premier League Judicial Panel, in accordance with Premier League Rules W.19, W.20 and W.26.
"The proceedings before the Commission will, in accordance with Premier League Rule W.82, be confidential and heard in private. Under Premier League Rule W.82.2, the Commission’s final award will be published on the Premier League’s website. The League will be making no further comment until that time."
But what does this mean for Leeds and other relegation rivals? LeedsLive has put together a summary of the key details supporters need to be aware of following the emergence of an alleged breach.
What is permitted by the Premier League's profitability and sustainability rules?
Premier League rules state that clubs are allowed to lose up to £105million over a three-year period.
Everton's losses are of course far higher than that figure, yet clubs are allowed to make some deductions when submitting their final accounts. Community schemes, infrastructure payments and academy team expenditure are all examples of what can be deducted from total loss numbers.
In the last set of accounts, teams were also allowed to denote certain losses to the costs accrued from the pandemic. Everton believe that they are compliant with the Premier League's rules when these deductions are taken into account.
What are the possible punishments?
As no club has been punished in the Premier League era for this type of alleged breach, it is difficult to say with certainty what any punishment may look like. There is no precedent set, but the Premier League handbook does give a rough indication of what we might expect.
A points deduction - arguably the most severe punishment available - could be applied should Everton be found to be in breach of the league's financial rules. A fine could also be implemented as well as a potential transfer embargo or spending limit.
When could any punishment be applied?
As is currently the case with Manchester City, Everton are only at the beginning of a process that could lead to a potential punishment. An extensive legal procedure - and potential subsequent appeal should Everton be found to be in breach of the rules - would suggest that any punishment this season seems unlikely with less than a dozen games to go.
What have Everton said?
A club statement read: “Everton Football Club is disappointed to hear of the Premier League’s decision to refer an allegation of a breach of Profit & Sustainability regulations to an independent commission for review.
“The club strongly contests the allegation of non-compliance and together with its independent team of experts is entirely confident that it remains compliant with all financial rules and regulations.
“Everton is prepared to robustly defend its position to the commission. The club has, over several years, provided information to the Premier League in an open and transparent manner and has consciously chosen to act with the utmost good faith at all times.
“The club will not be making any further comment at this time.”
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