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Forensic Services

Review of deferred consideration under SPA

Forensic Services team assesses deferred consideration in relation to a property company purchase


FRP was approached by a national bank that had purchased a property development company from a government agency under the terms of a share purchase agreement (SPA).

According to the SPA, the purchase price of the company comprised a nominal sum paid by the bank up front, with the remainder to be paid following the sale of the final property developed by the company.

The deferred consideration was to be calculated using a formula agreed between the bank and the agency, which, broadly speaking, equated to 50% of the profits made by the development company in respect of the properties.


Following the sale of the final property, the bank and government agency required an independent third party to verify the deferred consideration calculation.

Our Forensic Services team was instructed to review the calculation prepared by the bank to ensure it was performed in line with the SPA, and to perform sample testing of the balances underlying the calculation.

We set out the results of our review in a memorandum for both parties, highlighting the areas in which the calculation did not reflect the SPA and noting where we were unable to corroborate certain items because of a lack of supporting documentation.


We concluded that the bank had broadly followed the methodology set out in the agreement, notwithstanding a number of discrepancies in the figures used. Our memorandum formed the basis for the parties to agree upon a final payment in respect of the purchase of the property development company.

Our memorandum formed the basis for the parties to agree upon a final payment. Christopher Osborne Forensic Services

Related team

Christopher Osborne

Christopher Osborne

  • Partner
  • Forensic Services
  • London

Karen Mura

Karen Mura

  • Director
  • Forensic Services
  • London