Zurich (AFP) - Fifa on Friday announced a US$369 million (S$517 million) loss for 2016, a second straight annual deficit, as it recovers from scandals that have rocked world football's governing body and acknowledged it had to use hundreds of millions of dollars of its reserves.

Fifa blamed the loss on having to investigate the scandals, bad investments and accounting changes.

But there is worse to come for the organisation, which is rebuilding after its near collapse at the end of the tainted Sepp Blatter era.

It expects to lose US$489 million, before tax, in 2017 before a World Cup revenue bonanza in 2018 rescues the accounts.

Fifa's losses for 2015-2017 are set to hit US$910 million even though it revised its 2015 deficit down from US$122 million to US$52 million.

Revenues fell to US$502 million in 2016 from US$544 million in 2015.

Fifa said its reserves had fallen from US$1.4 billion in 2015 to US$1.04 billion in 2016 and they are expected to crash to US$605 million this year.

Fifa is banking on making US$1.1 billion in profits in 2018 when the World Cup is held in Russia, which would give a surplus of about US$100 million for the organisation's four-year accounting cycle.

The organisation said the bumper profits, mainly from television deals, would help bring its reserves back to US$1.7 billion in 2018.

Since a police raid on a Fifa congress hotel in May 2015 when seven football officials were arrested, Blatter and his two top deputies, secretary-general Jerome Valcke and finance officer Markus Kattner, have been suspended or fired.

The three awarded themselves huge bonuses and pay rises during their final years in power and all face criminal investigation.

New Fifa president Gianni Infantino took over promising reform but also higher payments to the 200-plus national federations that are now costing Fifa dearly.

Infantino said: "2016 was a turning point when the first and vital steps to restore trust in the organisation were taken.

"This includes a responsible and transparent way of managing revenue and expenditure," he added.

Fifa said the main cause of the 2016 loss was down to new accounting rules.

Before, they booked profits when contracts were signed, now they can only be counted when the contract, such as the World Cup, is completed.

Accounting experts said, however, this change would only account for about US$35 million of the 2016 loss.

Fifa also spent US$50 million on investigating the lingering scandals.

US authorities have charged about 40 individuals and companies over more than US$200 million in bribes paid for television and other commercial deals.

Many of the defendants, who are to go on trial in New York in November, are former Fifa executive members.

But the organisation also admitted that it lost US$50 million on the Fifa museum that was a pet Blatter project.

Fifa spent FR140 million on the three-floor museum in Zurich which has become a huge white elephant.

Since opening last year, it has attracted an average of 11,000 visitors a month, barely half its target.

Thirty-six museum jobs have been cut but Fifa denies it plans to close the establishment.

The organisation also suffered a multi-million dollar loss on its investment in the Ascot Hotel in Zurich which is near the museum.

Amid the scandal fallout, Infantino has had to find ways to fund his promise to triple payments to national federations from US$1.6 million every four years to up to US$5 million.

Despite the red ink headlines, Fifa's leadership says the organisation is not in trouble.

"In terms of cashflow, we are very comfortable," said a source close to Fifa.

The organisation predicts revenue of US$5.65 billion for the four-year cycle ending with the 2018 World Cup.

It said there are contracts for 76 per cent of this figure. Fifa relies overwhelmingly on the World Cup, held every four years, for its revenues.