The figures can be translated into warranties.
The figures can be translated into warranties. The finding should be aligned with data room, purchase price and SPA.
Purchase price & earn-out
Management accounts and quality of earnings in an acquisition: monthly figures, adjustments and SPA warranties
Management accounts in an acquisition: review monthly figures, quality of earnings, adjustments, disclosure and SPA warranties.
Your law firm
BRANDAUER Rechtsanwälte
Salzburg law firm for corporate, company and transaction law
Every transaction is handled by a coordinated team of lawyers, legal staff and specialists. In company acquisition matters we look at structure, contract, tax and liability together.
19 August 2026 · Mag. Bernhard Brandauer, Rechtsanwalt
Months often pass between annual accounts and signing. Buyers then rely on management accounts, monthly reports and quality of earnings findings for valuation, price formulas or earn-out.
This is not a second valuation article. It explains how unaudited monthly figures should be legally classified and protected in the SPA.
Deal review
Does this point need specific contract protection before signing?
The questions classify risk, data room and SPA effect.
Already know you want to get in touch? Go straight to the enquiry form.
Does price or earn-out rely on monthly figures?
Then it must be clear whether the figures are audited, internally prepared, adjusted or preliminary.
All paths at a glance
Overview of all answers.
The assumptions need more disclosure before signing.
The assumptions need more disclosure before signing. Before signing, documents, responsibilities and legal consequences should be refined.
Unaudited management accounts are a purchase price risk.
Unaudited management accounts are a purchase price risk. Without clarification, purchase price, liability and integration risks arise.
The point does not currently drive the deal.
Still document the assumption in the data room and check whether a short warranty is sufficient.
Do not treat monthly figures like annual accounts
Do not treat monthly figures like annual accounts
Management accounts are often internally prepared and unaudited. Buyers should clarify who prepared them, which accounting logic applies and whether accruals, subsequent entries or one-off effects are missing. The issue connects to the accounts warranty and locked box and closing accounts.
Translate quality of earnings into contract logic
Translate quality of earnings into contract logic
A QoE report helps only if its findings are reflected in price, warranties, disclosure and indemnities. Adjustments and special effects should not remain only in a presentation.
Review matrix
Connect finding, risk and contract effect
The overview shows how the deal finding is translated into transaction documents.
| Point | Review | Contract effect |
|---|---|---|
| Monthly accounts Currency and accounting logic | Warranty on figures | |
| Adjustment One-off effects, owner costs | Price or disclosure | |
| Variance Budget against actuals | Earn-out and covenant | |
| QoE finding Sustainable earnings | Indemnity or adjustment |
The concrete solution depends on structure, sector, data room and bargaining position.
Practice point: The more signing and closing depend on volatile monthly figures, the more precise definitions, disclosure and dispute mechanisms must be.
FAQ
Common questions on management accounts and quality of earnings in an acquisition: monthly figures, adjustments and spa warranties.
Are management accounts legally binding? +
Only if the contract includes them or links warranties, price formulas or indemnities to them.
What does quality of earnings mean in the SPA? +
The finding should be translated into warranties, adjustments, disclosure and price logic.
Who bears the risk of wrong monthly figures? +
That depends on warranty, knowledge, disclosure and negotiated indemnity.
Topics
Management accountsQuality of earningsMonthly figuresSPAPurchase price
Structuring a deal, reviewing a contract, securing the risks?
When buying a company, structure, review and contract decide. Call us directly or send an email, callback within one business day.
Contact
A direct line to the firm.
Address
BRANDAUER Rechtsanwälte GmbH Giselakai 51 5020 Salzburg
Phone
+43 662 6280000