Companies warned on hurried deals
Companies face losing millions if they rush into deals, say KPMG forensic accountants.
Companies face losing millions if they rush into deals, say KPMG forensic accountants.
The current economic climate means there is more pressure on companies negotiating deals to get the best price.
But if issues, such as the price adjustment mechanism and the preparation of completion accounts, are not dealt with properly before completing deals, companies could face costly post-completion disputes, says KPMG.
Ivan Seery, director of KPMG forensic accounting, said: ‘The completion accounts mechanism has frequetnly been used retrospectively as a means to re-negotiate the price of a deal. Sellers and buyers both need to pay greater attention to the detail; they must ensure that the price adjustment mechanism is not overlooked in the rush to “get the deal done”.’
Seery has urged negotiators to check all accounting aspects in addition to the due diligence work.
Problem areas include inadequate access rights to perform accounts’ reviews, compliance of completion accounts with national requirements and the diverse price adjustment mechanism for cash, debt and working capital.
Links
Forensic accounting still lucrative
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...
View resourceIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceThe first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...
View resourceThe ICAEW confirms new vice president, with senior heads appointed at KPMG and EY. Within the mid market, a flurry of end of year partner appointments...
View articleThis follows an investigation into undisclosed personal loans and issues with an acquisition. Despite challenges, the company aims to achieve £1bn in ...
View articleThe ICAEW confirms new vice president, with senior heads appointed at KPMG and EY. Within the mid market, a flurry of end of year partner appointments...
View articleThere is optimism that the IPO market will rebound in the second half of 2024, driven by pent-up demand and potential improvements in economic conditi...
View articleThe ICAEW confirms new vice president, with senior heads appointed at KPMG and EY. Within the mid market, a flurry of end of year partner appointments...
View articleKPMG confirms reappointment of it's UK chair, while EY announces Janet Truncale as the next EY global chair and CEO Read More...
View articleThe ICAEW has announced the appointment of its forthcoming chief executive Read More...
View articleThe FRC has announced Richard Moriarty as its new chief executive, replacing Sir Jon Thompson Read More...
View article