Which of the following is true about the treatment of bonuses under salary cap?

In the context of salary cap management, the correct statement regarding the treatment of bonuses is that most bonuses are prorated over the length of contracts. This means that rather than counting the entire value of a bonus against a team's salary cap in the year it is awarded, the bonus is spread out evenly across the life of the contract. This prorating allows teams to manage their salary cap more effectively and to avoid a significant spike in their salary cap hit in any single year.

This treatment is particularly common for signing bonuses, which are typically prorated over the term of the contract, allowing teams to allocate the cap hit evenly, thus helping to maintain a balanced cap situation. While other bonuses, such as performance-based bonuses, might not be structured in the same way, the general practice is to prorate as this provides teams with more flexibility and aids in long-term financial planning.

Understanding this concept is key for those involved in contract negotiations and salary cap management, as it affects both team budgeting and player negotiations moving forward.