Chelsea chief executive Peter Kenyon insisted the club remain on course to break even by 2010 after posting record pre-tax losses of £140million.
For the second successive season, the Barclays Premiership champions have far outstripped the record losses of any other British club.
Chelsea posted a loss of £87.8million for the financial year 2003-04, but the latest figures for the year ending June 30 2005 reveal the West London club have now lost £227.8million in the first two years of Roman Abramovich's ownership.
But Kenyon remains positive that the club, who won their first top-flight title for 50 years under coach Jose Mourinho last season, are in much better health than the figures suggest.
'These figures reflect the continuing restructuring which we began in 2003,' said Kenyon.
'The overall loss is, in the main, down to some exceptional items that were necessary in order to help us achieve our strategic business aim of break-even by 2009-10.
'In simple terms we have taken some pain now for long term gain.'
The accounts include the cost of terminating their sponsorship agrement with Umbro.
Chelsea paid out £25.5million to break off the agreement earlier than expected, and they also paid another £13.8million to write off the potential transfer value of sacked striker Adrian Mutu.
Mutu was dismissed by the club after testing positive for cocaine and the figure inflated the losses, as did the £5million paid to Tottenham as part of the compensation package for tempting Frank Arnesen to Stamford Bridge to run the youth set-up.
Chelsea were also forced to write off paper value to the tune of £9million after midfielder Juan Sebastian Veron insisted he completed his contract on loan with Inter Milan.
The club will post the results with Companies House on Monday and another indication of the scale of the loss will see Chelsea record an operating loss on day-to-day business of £6.3million - compared to the £46.3m profit announced by Manchester United this week.
Chelsea's transfer spending also outstripped the rest of the country with £101million spent on recruiting such star players as Didier Drogba and Ricardo Carvalho.
However, this figure was greatly reduced from the £175m spent on new players in Abramovich's first year at the helm.
The massive wage bill totals £108.9million but even that figure was down by some £6.6million on the previous year.
Turnover dropped from £152.1million to £146.6million but Chelsea point to the sale of Chelsea Village Travel as the main reason for the reduction.
New income from the club's sponsorship deal with Samsung will show up in next year's account and the £12million annual contract with adidas will be included a year after that.
Kenyon added: 'With continued success on the field and the resulting growth of our revenues, we are confident of achieving our targets.'