FFP - Transfers - Explanation?

Does anyone actually understand in detail why we are being restricted on signing players due to FFP.

This seems to be a common explanation rolled out at the moment for why we are not spending decent money on transfers - however can this be explained how this has come to pass.

I was thinking about this recently so assuming that you are only allowed to spend a % of your turnover on wages/transfers each year.

Surely a transfer fee becomes an asset in accounting terms so is not realised as an expense. Therefore we are better off spending higher on transfer fees but lower on wages as the wages are the main cost on a financial accounts that contribute to FFP.

Is the reason we are nearly in breach because since we joined the PL we have signed a large number of players who have been on reasonable wages and not been able to sell them on to reduce the wage bill - alot of our players seem to stick around until their contract runs out and we never recoup a fee for them and in the mean time they sit there costing us a packet each week.

To name but a few;

Mutch
Puncheon
Williams
CYL
Delaney
Sako
Cabaye
Campbell
Ledley
Mariappa
Chamakh
Flamini
Adebayor

Every single one of these players went on a free or were released - we may have even had to pay some of them off to get them out the club and off the wage bill. Not to mention the number of players still on our books who currently are not contributing to the side.