Under a completion accounts mechanism, the parties close at an estimated price, which is then adjusted based on accounts prepared after closing. The calculation principles must be clearly defined in the agreement.
Related terms
Locked box mechanismA price mechanism in which the purchase price is fixed on the basis of financial statements at a date before closing, and leakage of value after that date is prohibited.Share purchase agreement (SPA)The agreement governing the price, payment terms, representations and warranties, indemnities and closing conditions in a share transfer.Working capitalThe difference between current assets and current liabilities; in practice usually used as net working capital, consisting mainly of trade receivables, inventories and trade payables.Cost of capitalThe minimum rate of return investors expect from an investment in return for the risk they take.Discounted cash flow (DCF)A valuation method based on discounting the free cash flows an asset or company will generate in the future to the present using an appropriate discount rate.Earn-outA mechanism under which part of the purchase price is paid depending on the target company reaching certain performance targets after closing.
Last updated: October 22, 2026 · This definition is for general information only.