A little too simple with respect to the sale of players.
That £20m annual amortisation is deducted from the original £100m in each financial year. So after three years that £100m player will be "worth" (according to the accounts) £40m.
With two years left on his contract, we might offer him another two years, meaning he's got four years in total. That £40m book value is then reallocated over those four years, which means that annual amortisation is now only £10m.
On the other hand, we could sell him and the difference between the sale price and his book value of £40m determines the profit or loss. If we sold him for £50m, we'd record a £10m profit whereas if we sold him for £35m, we'd record a £5m loss, which is what we show directly in the Profit & Loss account.
People also have to be careful about saying things like "How can Chelsea (or whoever) not be in breach of FFP?" because they spent £250m in one window.
First of all, as explained above, that £250m goes through the accounts at £50m a year. Second, FFP is measured over a rolling three year period, so you've got to take two other years into account. Third, you can ignore certain expenditure for FFP purposes. That includes depreciation and any expenditure on youth development and the womens football team. For a PL club this could be something like £30m a year. Finally, because of Covid, clubs are allowed to ignore any losses directly attributable to lockdown.
You've also got to look at the overall impact of transfers and wages. If we sell players, we also lose their wages from the accounts, plus any outstanding amortisation.
As an example, assume we sell that £100m player for £50m after 3 years, and he was on £10m a year. We get a £10m profit on sale, we get rid of his £20m amortisation and his £10m wages. So we'll realise a net benefit of £40m in the year we sell him and £30m the following year.
Remember all the shit we got in the media 5 years ago, when we bought Walker, Mendy, Bernardo etc, and spent over £200m? The net impact of that summer's activity on the accounts was actually only a few million when you looked at the aggregate wages and amortisation over the two years to 2017 then 2018. That's because we also got rid of a load of players (about 17 sold, released or loaned I think).
So don't be fooled by a single transfer window's buys. You have to look at the big picture where FFP is concerned.
