Purchase Price Adjustment

A Purchase Price Adjustment is a change made to the agreed-upon price of a business or asset after the initial agreement, based on certain agreed-upon factors like actual financial performance or asset values at closing. Its purpose is to ensure that the final price accurately reflects the true value at transaction time, accounting for differences between estimated and actual figures. This adjustment helps both buyer and seller avoid discrepancies caused by unforeseen changes between the agreement and closing, making sure the final payment fairly represents the asset’s or business’s true worth.