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Arne Slot has seen his squad transformed this summer(Image: Carl Recine/Getty Images)

Liverpool may have already spent £265m in the summer transfer window, not including performance related add-ons, but the Premier League champions are now being linked more strongly than ever with a deal for Alexander Isak that could cost £120m.

So in the era of PSR, where clubs are evaluated on not posting losses of £105m across a three-year cycle, how can they continue to spend as they attempt to equip Arne Slot with a squad capable of retaining their title?

That they only signed Federico Chiesa, one of several players now up for sale, last summer has certainly helped but the key to their splurge is amoritisation and the book value of sales outweighing fees paid out that are spread across several seasons.

The sales of Trent Alexander-Arnold, Caoimhin Kelleher and Jarell Quansah for a combined £61.5m, with more departures destined to follow, means the Reds could sign Isak and still add another player amid continued links with Crystal Palace captain Marc Guehi.

And here is how things could look on the balance sheet.

READ MORE:Transfer news LIVE: Alexander Isak bombshell, Arsenal break transfer rule, Man Utd striker searchREAD MORE:Liverpool handed clear run at Alexander Isak transfer as Arsenal and Chelsea stance emerges

The spend on seven new signings is £265m with about £30m extra in add-ons to be factored in before considering various levies and agent fees.

Transfer fees paid so far

Article continues belowHugo Ekitike (Eintracht Frankfurt) £69mMilos Kerkez (Bournemouth) £40mFlorian Wirtz (Bayer Leverkusen) £100mJeremie Frimpong (Bayer Leverkusen) £29.5mGiorgi Mamardashvili (Valencia) £25mArmin Pecsi (Puskas Akademia) £1.5mFreddie Woodman (Preston) free transferAlexander Isak would cost £120m from Newcastle.(Image: Newcastle United via Getty Image)

Deals can be spread across a period up to five years - this rule was changed recently, around the same time Chelsea started committing players to seven and eight year deals - meaning the fee for Wirtz, for instance, could be included in the next five years' accounts at £20m a pop.

The same applies to everyone else - Kerkez for £8m, Mamardashvili for £5m - meaning an approximate total of £53m on fees so far.

Were they to add Isak for £120m, that would add another £24m.

Estimated amoritised fees

Hugo Ekitike £13.8mMilos Kerkez £8mFlorian Wirtz £20mJeremie Frimpong £5.9mGiorgi Mamardashvili £5mArmin Pecsi £300,000

Yes and that is why the term "pure profit" is also so vitally attached to the likes of Quansah, who came through the academy, Kelleher's schoolboy team in Ireland, Ringmahon Rangers, did pocket a significant sell-on fee following his departure to Brentford but it does not move the dial hugely in terms of Liverpool's spending power.

The only issue with this is it is a one off, meaning the outlay above will still be in next season's accounts and that places an emphasis on Liverpool to keep on selling to ensure the books remain balanced.

A host of players, from Chiesa to Darwin Nunez and talented young midfielder Harvey Elliott, could depart Merseyside before the end of the transfer window to ease any concerns about moving on players next summer.

Darwin Nunez may not have much of a future at Anfield.(Image: Catherine Ivill - AMA/Getty Images)

Very, very healthy.

All projections point to revenue exceeding £700m for the latest financial year thanks to their title win, performances in the Champions League and TV money.

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