A purchase-price true-up is the single cash payment, in either direction, that reconciles what a fund paid at closing against the final completion accounts — governed entirely by the timelines and dispute process the purchase agreement sets, not by any statutory deadline.
The true-up is the second half of a two-step process described consistently across Ontario deal guidance: "a target working capital level is set in the purchase agreement. At closing (or shortly after), the actual working capital is measured, and the purchase price is adjusted up or down to reflect any difference from the target," with the adjustment process running as a closing-date estimate followed by a post-closing true-up once full accounting records are available.
Where the parties disagree on the number, there is no default legal deadline — "it depends entirely on your purchase agreement — many set a specific objection window," and the recommended first step is to re-read the adjustment mechanism itself before raising a concern, since agreements often impose strict deadlines. From there the usual path runs through an independent accountant for working-capital disputes specifically — a determination "often made final and binding by the agreement's own terms" — with arbitration or litigation available for anything the accountant's mandate does not cover.
Recall the completion-accounts example: a fund pays $150,000 above the base price at closing, based on an estimated net working capital of $2.55M against a peg of $2.4M. The final completion accounts, prepared 90 days later, put actual net working capital at $2.30M — $100,000 below the peg, not above it. The true-up payment therefore runs the other way and combines both errors: the seller owes the fund the $150,000 already overpaid at closing plus the $100,000 shortfall against the peg, a single $250,000 cash payment. The seller disputes $40,000 of the calculation, tied to how a warranty reserve was accounted for; under the agreement's own terms, that piece alone goes to the named independent accountant while the undisputed $210,000 is paid immediately.
See also: Completion accounts · Net working capital peg · Escrow account.
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