Closing Accounts

Buyers and sellers frequently agree that financial information for a business to be sold or transferred must be compiled as of the closing date, i.e. the date of the legal transfer. Often, these must also be audited or reviewed by a certified public auditor. These so-called closing accounts can serve as security for the buyer or other involved parties (e.g. banks), or may be used for determining the final purchase price.

WHICH COMPLEXITY DRIVERS APPLY?

• Potential questions regarding how to interpret specific provisions or missing provisions in the purchase agreement, e.g. consistency of the application of accounting methods or which assets and liabilities to be included.
• If the closing accounts are to be audited, detailed notes outlining of how the closing accounts were compiled (so-called basis of preparation) are required, because the preparer must first lay down the set of rules on which the closing accounts are to be based, in order to provide the auditor with a benchmark.
• Depending on the extent to which the sold unit is integrated in a wider group structure, diffculties similar to those encountered when preparing com-bined and/or carve-out financial statements may arise with regard to data investigation, data quality, allocation of assets, liabilities, income and expenses.

WHAT ARE THE COMPONENTS OF CLOSING ACCOUNTS?

The contracting parties are free to determine the components of the closing accounts. E.g. a balance sheet and/or income statement together or without comparative figures may be prepared. Alternatively, individual balance sheet items or balance sheet summaries can also be compiled.

WHAT SUPPORT DOES AUREN OFFER?

• Many years of extensive expertise in compiling and auditing combined financial statements based on our advisors’ project experience with the Big-4 companies
• Committed, effective teams
• Short and fast communication and decision-making channels between our advisors and you
• Pragmatic, consistently solution-focused approach
• As your advisor, we can assist you as the seller in drawing up closing accounts, or you as the buyer in critically evaluating closing accounts