By Monday, the Premier League must inform its member clubs whether they have been judged to be in compliance or in breach of the competition’s Profit and Sustainability Rules (PSR), their equivalent of financial fair play regulations, following last month’s submission of their accounts for the 2022-23 season.

Many of their rivals expect – and perhaps even hope – that Chelsea will be in trouble, paying the price for an unprecedented £1 billion ($1.3 billion) recruitment drive under ambitious owners Todd Boehly and Clearlake Capital that has dominated the last three transfer windows without yet resulting in any notable success on the pitch.

Yet, even if scepticism outside the club is high, concern is low at Stamford Bridge. Chelsea firmly believe that, despite such aggressive spending, they have kept within the Premier League’s allowable loss limit of £105 million ($134 million) over the three-year monitoring period ending on June 30, 2023.

Here, The Athletic seeks to explain how that can be the case and why Chelsea’s road to financial compliance may get significantly more difficult next year.

Boehly and Clearlake’s biggest achievement as Chelsea owners to date might be pushing the accounting concept of amortisation into mainstream football discourse.

It has been widely documented that they have committed many of their new signings to hyper-long contracts, allowing them to spread the transfer fees over a significantly longer time period to lower the annual cost on the accounts.

An example: signing an eight-and-a-half-year deal on arrival from Shakhtar Donetsk in January 2023 means Mykhailo Mudryk’s £62 million transfer fee is amortised at £7.3 million per year. That number would have been £12.4 million had he signed a more standard five-year contract.

UEFA effectively closed this loophole in June by capping amortisation at five years regardless of contract length and Premier League clubs voted to follow suit last month. But neither of these rule changes affects the deals Chelsea have already done and the amortisation benefit of these longer deals is vital in the 2022-23 accounts.

Chelsea signed nine players in the 2022 summer window and eight more in January 2023, including the then club-record £106 million signing of Enzo Fernandez from Benfica. We cannot know the exact numbers involved in these transfers, particularly once additional costs such as agent fees are factored in, but based on publicly reported figures, The Athletic estimates a total outlay of £555.4 million (this includes the loan fees paid for Denis Zakaria and Joao Felix).

That is a huge number, but it is not the relevant one when it comes to Chelsea’s PSR calculations.

The figure that matters is £96.6million, which is The Athletic’s estimate of the total amortised cost of Boehly and Clearlake’s 15 new permanent signings for the 2022-23 season, plus the flat loan fees for Zakaria and Joao Felix.

Chelsea also sold players between July 1, 2022, and June 30, 2023 – 11 to be precise, headlined by Kai Havertz’s move to Arsenal, Mateo Kovacic’s sale to Manchester City and the departures of Kalidou Koulibaly and Edouard Mendy to Saudi Pro League clubs. The total generated from the sales (also an estimate based on publicly reported transfer fees) is £202.5 million.

That is a much smaller number than the total transfer spend, but clubs record fees for player sales in one lumpsum on their accounts, minus their remaining book value.

Havertz, for example, was sold for the same initial amount (£62 million) Chelsea paid Bayer Leverkusen to acquire him in 2020, but with two years remaining on his contract at Stamford Bridge, his book value was just £24.8 million, meaning the remaining £37.2million of his sale fee is recorded as profit on the accounts.

Many of the other players Chelsea sold in 2022-23 had either been at the club long enough to be almost fully amortised (Emerson Palmieri, Michy Batshuayi, Kenedy) or were academy graduates who represent pure profit when sold (Ruben Loftus-Cheek, Billy Gilmour). The only players sold at an accounting loss were Timo Werner and Koulibaly.

All in all, when the remaining book value is factored in, The Athletic estimates Chelsea’s profit from player sales to be £100.7 million for 2022-23. This more than offsets the first year of the amortised cost of the Boehly-Clearlake signings, putting the club in a stronger position to meet the Premier League’s financial requirements than it might first appear.

Chelsea were still a Champions League club in 2022-23, reaching the quarter-final stage before being eliminated by Real Madrid. That is worth around £80 million in additional broadcast revenue in the accounts, while the European nights hosted at Stamford Bridge also provided a boost to matchday income.

Matchday revenue decreased overall by hosting 24 home matches in 2022-23, down from 29 across all competitions in 2021-22; that is the financial cost of being unlucky enough to draw Manchester City away in the third round of both the Carabao Cup and FA Cup. There were, however, also marginal gains from leaving behind the UK government-imposed sanctions, which limited Stamford Bridge’s capacity to 32,000 for the last five matches of 2021-22.

Plunging from third to 12th in the Premier League came at a considerable cost (the difference in merit payment per place in the table is £1.9 million), but this financial hit is offset by the broader increase in the Premier League’s TV income, primarily from international broadcast agreements.

Telecommunications firm Three was in the final year as Chelsea’s primary shirt sponsor, bringing in £40 million, while cryptocurrency platform Whalefin agreed to pay £20 million per year to be sleeve sponsors (although the agreement was terminated at the end of 2022-23).

Nothing in Chelsea’s other revenue streams for 2022-23 rings alarm bells for the club’s overall PSR compliance.

• The Athletic report