Leicester have announced a £20.8million loss but have still met Financial Fair Play rules.
The Foxes have fallen within the Football League's FFP regulations after announcing their financial results for the year ending May 31, 2014 with the loss down from £34million in 2013.
A club statement read: "Through reducing its costs and increasing its revenue streams, the club has been able to submit a return which is in compliance with the Football League's Financial Fair Play (FFP) regulations.
"After costs relating to the club's promotion, academy expenditure and other costs allowable under FFP guidelines are added back, the club recorded losses within the allowable parameters set by the League."
Leicester's promotion-winning season last term, where they clinched the Sky Bet Championship title, helped the club increase their revenue to £31.2million - up from £19.6million.
Staff costs increased to £36.3million after promotion bonus payments of £9.4million while match receipts rose from £5.7million to £6.9million with the average attendance climbing to 25,003.
Chief executive Susan Whelan said: "The establishment of Leicester City as a successful, self-sustainable Premier League football club remains a long-term work in progress, but these results are a positive reflection of our efforts to build solid foundations to that end.
"It should be noted that one of the most successful seasons in the club's recent history was achieved while ensuring compliance with the Football League's FFP regulations, for which our football management staff and senior management deserve great credit. The club's responsible approach to adapting to the demands of the Premier League has also ensured such compliance, should it be required, would not be compromised in the future."
Leicester are bottom of the Barclays Premier League and go to Manchester City on Wednesday.