How completion accounts support works
A NIFA member can review the sale agreement, completion accounts, accounting policies, working capital adjustments, debt-like items, earn-out calculations and related financial records. This can include preparing or reviewing completion accounts and earn-out calculations, considering supporting documentation and assessing how the business’s current and historic accounting practices should be applied. The application of past accounting practice is an issue that frequently arises in completion accounts disputes and earn-out calculations.
The expert can then explain the accounting treatment, identify disputed areas and assist with negotiation, expert determination or proceedings. Where a matter is referred for expert determination, a NIFA member can help a party prepare clear and concise written submissions to the independent expert or can be appointed as the independent expert determiner responsible for resolving the accounting issues under the terms of the relevant agreement.
Who completion accounts is for
Completion accounts support is for solicitors, buyers, sellers, corporate finance advisers, accountants and businesses involved in post-completion disputes or expert determinations where the purchase price or accounting treatment is in issue.
NIFA members are experienced in acting for both claimants and defendants, including buyers and sellers, and can be appointed either in an advisory capacity to support one party or as an independent expert determiner in a completion accounts dispute. Members can also work with relevant employees and management teams to understand the business and its current and historic accounting practices.
When completion accounts can help
NIFA members are experienced in advising on the financial aspects of corporate transactions and the disputes that can arise in the period post-completion. NIFA members can offer support with:
- Purchase price adjustment disputes.
- Working capital, cash, debt and net asset disputes.
- Earn-out and warranty-related accounting issues.
- Expert determinations requiring independent technical accounting analysis.
- Preparing and reviewing completion accounts and earn-out calculations.
- Negotiating a party’s position and preparing written submissions to an independent expert.
- Breach of warranty matters, including advice on liability and/or quantum and the calculation of consequential losses arising from an alleged breach.
- Independent expert determinations of completion accounts or earn-out accounts under the terms of a sale and purchase agreement or other relevant agreement.
Completion accounts process and outcomes
The process usually begins with a review of the transaction documents, disputed accounting points and timetable for determination. The forensic accountant may also work with the client, legal advisers and relevant members of the management team to understand the business, the supporting documentation and its current and historic accounting practices.
The forensic accountant then analyses the relevant records, applies the agreed accounting mechanism and identifies and quantifies the areas of dispute, considers areas of challenge and prepares clear evidence on the financial impact. Where submissions are being made to an independent expert, the analysis can be presented clearly and concisely to support the party’s position.
The outcome is a more focused dispute, supported by independent accounting analysis that can assist negotiation or determination.
Where the sale and purchase agreement provides for expert determination, a NIFA member may also act as the independent expert and determine the disputed completion or earn-out accounts in accordance with the relevant agreement.
Why choose a NIFA for completion accounts matters?
NIFA brings together independent forensic accountants who understand completion accounts disputes, commercial transactions and expert determination processes. With backgrounds in general accountancy practice, members are familiar with generally accepted accounting practice and can consider how relevant accounting principles and historic practices should be applied within the particular transaction.
Members have experience acting both as advisers and independent experts, enabling them to identify and quantify disputed areas, review supporting evidence, identify points of challenge and formulate clear submissions for an independent expert. They work with clients and legal advisers to deliver objective, independent and fit-for-purpose analysis in line with high professional and service standards.
Legal professionals and transaction teams can use NIFA to identify a suitably experienced specialist, while members benefit from shared resources, training, referral opportunities and annual quality review.
To find a forensic accountant with the completion accounts expertise your matter requires…
FAQs
Without early accounting input, parties may miss issues in the sale agreement, apply accounting policies inconsistently or spend time debating figures that need technical analysis. Early input can also help identify areas of challenge, establish how current or historic accounting practices should be applied and quantify the financial effect of the disputed items before positions become entrenched.
Yes. Where a sale and purchase agreement contains an expert determination mechanism, a NIFA member can be appointed as the independent expert to determine disputed completion or earn-out accounts. Where the parties cannot agree on an expert, an appointment may also be made by a professional body under an appropriate appointment scheme. The existing NIFA page gives the ICAEW President’s appointment scheme as an example.
Yes. NIFA members can act in an advisory capacity, helping a buyer or seller identify and quantify disputed items, assess the supporting documentation, negotiate its position and prepare clear written submissions for consideration by the independent expert.
Yes. NIFA members can advise on accounting issues relating to liability and/or quantum in breach of warranty matters, including calculating consequential losses said to have arisen from an alleged breach.
Contact NIFA with the sale agreement, the disputed accounting points and the timetable for determination so a suitable expert can be identified.
Our recent completion accounts work
NIFA members regularly support completion accounts disputes involving purchase price adjustments, earn-outs, warranty claims and expert determinations.
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