Players values are amortized (written down) over their original contract length. So if he signed a 4 yr deal when he arrived for £12m then his intangible asset value will have been written down by £3m per annum, and after the 4 years his value on the balance sheet is therefore £0.
This fact is what people don't seem to grasp when talking about net spend and FFP. As a club could spend say £100m in the financial year on 5 players @£20m each and all on 5 yr deals. The cost shown for these transactions in the accounts is the amortization (write down value) so in year 1 that would be a cost of £20m. If in the same period they sell a player who's either a homegrown or a player who is beyond their initial contract length for £20m, then the net increase in the cost of their player trading would be £0 in that financial year.