Our Services - Corporate services - Making an Acquisition / Investment

Working capital adjustments and completion accounts

Some deals are structured so that the final purchase price is determined by reference to the net assets position of a business at a particular point in time. Typically accounts are prepared as at that date and these are known as Completion Accounts. 

The sale and purchase agreement will describe the basis on which these accounts are to be prepared and the mechanism by which the closing price is to be worked out.  This calculation will use balances taken from the completion accounts. 

This is an area in which any ambiguity in the sale and purchase agreement can result in lengthy debates between buyer and seller and their respective advisors. 

We can advise on completion accounts before and after a transaction:

• advise on or draft the accounting policies to be applied
• help draft wording in the share purchase agreement to protect the buyer or seller from inappropriate accounting policies or ambiguous accounting treatments
• prepare completion accounts on your behalf
• review completion accounts which you have prepared
• review completion accounts prepared by the other side
• act as independent adjudicators where completion accounts are subject to dispute.