Liverpool have spent nearly £300m already this summer and have been linked with additional bids that could push spending toward £400m. Premier League PSR measures profitability over a three-year period rather than individual transfer windows. Transfer fees are amortised across the length of a player's contract, up to a five-year maximum, so a £100m signing on a five-year deal counts as £20m per year in accounts. A player's book value falls by the amortised amount and subsequent sales are recorded as profit after amortisation, which can produce large recorded profits if players are sold later.
For accounting purposes, any transfer spending is amortised (or 'split', if you don't speak accountant) over the length of a player's contract, or up to a maximum of five years if the contract is longer. That means that for accounting purposes, a 100m player on a five-year deal will show as having cost the club 20m a year for five years.
It takes into account a three-year period, and the money spent in any one transfer window does not really match one-to-one with the money they receive from player sales. Florian Wirtz cost Liverpool at least 100m, but not all of that money counts against their profit number in one go (Image credit: Getty Images) While that is happening, the player's value in the club accounts is reduced by the same amount - and sales are recorded as profit after amortisation.
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