Closing before or after year end

searcher profile

June 25, 2024

by a searcher in Vancouver Island, British Columbia, Canada

Hi All!

The seller’s year end is Aug 31, and he is hoping to finalize the transaction prior to this date. Are there any pitfalls to doing so, that I should be concerned with?

I have contacted numerous accountants on Vancouver Island, but all have been too busy to chat.
I welcome you feedback.

All the best!

Mike

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commentor profile
Reply by a searcher
from United States Military Academy in Haddonfield, NJ, USA
I moved very fast on my deal, it was very small and straight forward. We had a hard deadline of closing before a major surgery for the seller.

High risk? Maybe. I was in “get it done mode” and not letting anything stop me.

Should I have spent more time doing diligence? Yup. But what really hurt me were my blind spots about the industry, not the specific company.

Would I move that fast again? For the right deal reason, absolutely.

For what it’s worth, hope that helps.
commentor profile
Reply by a searcher
from Concordia University in Toronto, ON, Canada
If the closing is after FYE, the seller has to prepare the FSs and submit tax returns twice, once for the current fiscal year ending Aug 31 and once for the closing statements & return. Maybe that's the reason. If you close before FYE, they will prepare only the closing statements and accompanying tax returns. And then it's your take to change the FYE or keep it.
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