Completion Accounts
/kəmˈpliːʃən əˈkaʊnts/
Completion accounts are a set of financial statements prepared after a business sale to show the company's true financial position on the completion date, which then determines the final purchase price.
Completion accounts are a set of financial statements prepared after a business sale to show the company's true financial position on the completion date, which then determines the final purchase price.
Completion accounts bridge the gap between when a deal is negotiated and when it actually completes.
They capture the real financial picture on closing day, ensuring the buyer pays a fair price based on what they're actually getting, not what the company looked like months earlier during negotiations.
The final price gets adjusted up or down based on what the completion accounts reveal.
If your company has more cash or fewer debts than estimated, you'll receive additional payment.
If it's the other way round, you might owe money back to the buyer or receive less than initially agreed.
These accounts are drawn up shortly after the deal completes-typically within 30 to 90 days.
Your team (often with accountants) prepares a draft first, then the buyer reviews it.
Both sides need to agree on the figures, though there's usually a dispute resolution process if you can't reach agreement.
They're essentially a snapshot balance sheet showing assets, liabilities, cash, and debts on completion day.
The sale agreement will specify exactly what needs to be included and how items should be valued, following the same accounting policies used in earlier financial statements.
Buyers want certainty about what they're purchasing.
Between signing and completion, your business keeps trading-customers pay invoices, you pay suppliers, cash moves in and out.
Completion accounts ensure the buyer isn't overpaying for a company that's changed since the deal was negotiated.
Some deals use "locked box" mechanisms instead, where the purchase price is fixed based on accounts from an earlier date.
After that locked box date, all value generated belongs to the buyer, even before completion.
This approach is simpler but requires careful monitoring of what cash and value leaves the business before the deal closes.
