When Portmouth signs a player we generally know how much has been paid in transfer fees, the figures from www.soccerbase.com are a good source.
The club has to pay the transfer fee to the selling club. In the club accounts it then has to report how much it views each player's worth has declined each year. So for example Kevin Boateng for £4,00,000 on a four year contract costs the club £1m per year. This is what is reported as 'amortisation' in the club accounts. At the end of the contract the player can just leave on a 'free' so he is viewed as potentially no worth to the business after that.
This only covers the costs for players bought in. So Mark Wilson, for example, does not have any effect on the amortisation costs of the club, as he was never bought from another club. Also once a player has finished his initial contract he stops being counted. So if David James was on a three-year contract he would have no effect.
The huge increase from 2005 to 2009 shows the effects of club's transfer policy. The more they spend, then obviously the more it costs. Whether a club with the income of Portsmouth can afford this level of investment in players is dubious.