Working Capital Adjustment Dispute After a Turkish Company Acquisition: How Is the Price Recalculated? – 2026 Updated Guide

working Capital Adjustment Turkey | Foreign Buyer M&A Guide

Learn how working capital is recalculated after acquiring a Turkish company, including receivables, inventory, payables, completion accounts, expert determination and buyer remedies.

A working capital adjustment dispute may arise after a foreign buyer acquires a Turkish company and the parties disagree about the company’s financial position at closing.

The dispute may concern receivables, inventory, supplier debts, customer advances, accruals, tax liabilities or the accounting method used in the completion accounts.

This 2026 updated guide explains how the purchase price is recalculated and what remedies are available to foreign buyers in a Turkish M&A transaction.

What Is a Working Capital Adjustment?

Working capital generally represents the short-term operating assets and liabilities needed to run the company.

Depending on the Share Purchase Agreement, it may include trade receivables, inventory, prepaid expenses, supplier payables, accrued expenses and customer advances. Cash, bank loans and other financial items may be excluded if they are addressed separately as cash or net debt.

The SPA should define precisely which items are included and how they are valued.

How Is the Purchase Price Recalculated?

Many SPAs use a formula similar to:

Adjusted Purchase Price = Base Purchase Price + Actual Closing Working Capital – Target Working Capital

If actual working capital is below the agreed target, the price may decrease. If it is above the target, the price may increase.

The formula is only a starting point. The SPA’s definitions, accounting principles, measurement date, exclusions and dispute procedure control the calculation.

What Is Target or Normal Working Capital?

Target working capital is the level the company is expected to require for ordinary operations.

It is often calculated using historical accounts, seasonal trends, revenue levels and the company’s normal collection and payment cycle.

A target based on an unusual period may be disputed. The buyer should examine whether the reference period was affected by exceptional sales, delayed payments, inventory shortages or one-time transactions.

Which Items Commonly Cause Disputes?

Disputes frequently involve whether receivables are collectible, whether inventory is obsolete, whether supplier invoices were recorded, and whether customer advances should reduce working capital.

Other issues include unpaid employee benefits, tax accruals, related-party balances, warranty provisions, returns, credit notes, foreign-currency conversion and transactions recorded immediately before closing.

The parties may also disagree about whether an item belongs in working capital or should be treated as debt or a transaction expense.

How Are Receivables Valued?

Receivables should be assessed according to the SPA and the company’s applicable accounting principles.

The buyer may argue that overdue, disputed or uncollectible receivables should be discounted or excluded. The seller may argue that the customers regularly pay late but remain financially reliable.

Customer correspondence, payment history, aging reports, credit notes, subsequent collections and legal disputes may help determine the actual value.

How Is Inventory Treated?

Inventory may be overstated if products are obsolete, damaged, slow-moving, expired or not saleable at the recorded value.

The buyer should examine physical inventory counts, purchase dates, sales history, warehouse records, market prices and post-closing sales.

The seller may argue that the inventory was valued consistently with historical practice. The buyer should compare the method with the SPA and the company’s ordinary accounting policies.

Can Supplier Debts Affect Working Capital?

Unrecorded or delayed supplier invoices may reduce the company’s actual working capital at closing.

The buyer should review invoices received after closing, supplier statements, purchase orders, delivery records and payment schedules.

A liability may be treated as working capital, net debt or an indemnity item depending on the SPA.

What If the Seller Manipulated Working Capital Before Closing?

A seller may delay paying suppliers, accelerate collections, increase inventory shipments or record unusual sales to make working capital appear stronger.

The buyer should examine transactions shortly before and after closing and compare them with ordinary historical patterns.

If the seller intentionally manipulated the accounts, the buyer may have claims for price adjustment, breach of warranty, indemnity, damages or fraud.

Who Prepares the Closing Accounts?

The SPA may require the seller or buyer to prepare preliminary closing accounts after completion.

The other party is usually given a period to review and submit objections. The buyer should check whether the calculations comply with the SPA’s accounting hierarchy and definitions.

Failure to object within the contractual period may affect the buyer’s rights, so all deadlines should be recorded carefully.

Can an Independent Accountant Decide the Dispute?

Many SPAs provide for an independent accountant or expert to resolve accounting disputes.

The expert’s authority depends on the agreement. Some experts may decide only mathematical and accounting issues, while legal interpretation remains for a court or arbitral tribunal.

The buyer should prepare detailed schedules, supporting records and a clear explanation of each disputed item.

Can the Foreign Buyer File a Lawsuit?

A commercial lawsuit may be necessary if the parties dispute the meaning of the SPA, the validity of the completion accounts or the seller’s conduct.

The buyer may seek payment of the adjustment, damages, indemnity, declaratory relief or another contractual remedy.

The dispute-resolution clause should be reviewed first because the SPA may require expert determination, mediation or arbitration.

Can Arbitration Be Used?

If the SPA contains an arbitration clause, the working capital dispute may need to be resolved through arbitration.

The buyer should examine the seat, language, applicable rules, expert appointment process, interim measures and enforcement of the award.

A Turkish court may still be relevant for interim protection, evidence or enforcement depending on the agreement.

Can the Buyer Make a Unilateral Deduction?

The buyer should not deduct an amount from the purchase price or other payment unless the SPA clearly permits it.

A unilateral deduction may create a separate breach or payment dispute. The buyer should follow the notice, objection, expert and payment procedures agreed in the transaction documents.

What Evidence Should the Buyer Preserve?

The buyer should preserve the SPA, accounting policies, historical financial statements, closing accounts, bank statements, receivable aging reports, inventory lists, supplier statements and customer records.

Electronic accounting systems, invoices, cloud files, corporate emails and financial models may be important in 2026 disputes.

A forensic accountant can reconstruct the working capital at the exact closing date and identify unusual pre-closing transactions.

What If the Working Capital Dispute Reveals Fraud?

A calculation dispute does not automatically prove fraud. However, fictitious sales, concealed liabilities, manipulated inventory or deliberate payment timing may support a fraud or misrepresentation claim.

The buyer should identify who prepared the accounts, who approved them, what the seller knew and how the manipulation affected the price.

The buyer should also preserve evidence before accounting systems or company personnel change.

Can Directors or Advisors Be Liable?

The seller may be liable under SPA warranties and indemnities.

Directors, managers, accountants or advisors may face liability if they knowingly prepared false accounts or independently breached professional or management duties.

Personal liability is not automatic. The buyer should establish each person’s role and specific misconduct.

Can a Foreign Buyer Act from Abroad?

A foreign buyer does not always need to travel to Turkey. A Turkish lawyer may review the SPA, prepare objections, coordinate an accounting expert and pursue court or arbitration proceedings under a valid power of attorney.

Depending on the issuing country, legalization, apostille and official translation may be required.

Lawyer Fırat Fesih Kaya assists foreign buyers with working capital adjustments, completion accounts, purchase-price disputes, forensic accounting and M&A litigation in Turkey.

2026 Legal Considerations

Foreign buyers should negotiate clear definitions for working capital, target levels, accounting principles, seasonal adjustments, disputed receivables and expert authority before signing.

After closing, the buyer should preserve the company’s financial records as they existed on the measurement date and comply with every objection deadline.

The applicable rules on M&A agreements, accounting evidence, expert determination, arbitration, mediation and procedural deadlines should be reviewed before action is taken.

Frequently Asked Questions (FAQ)

1. What is a working capital adjustment?

It is a post-closing change to the purchase price based on the target company’s actual operating assets and liabilities at closing.

2. How is working capital usually calculated?

The calculation commonly compares actual closing working capital with an agreed target, subject to the SPA’s definitions and accounting rules.

3. Can overdue receivables be excluded?

They may be discounted or excluded if they are uncollectible or treated differently under the SPA.

4. Can obsolete inventory reduce the purchase price?

Potentially, if the inventory was overstated or not saleable at the value recorded at closing.

5. Can unrecorded supplier invoices affect the adjustment?

Yes. They may reduce working capital or be treated as debt or an indemnity item.

6. Can the seller manipulate working capital before closing?

Intentional payment delays, accelerated collections or artificial sales may support a price adjustment or separate legal claim.

7. Can an independent accountant resolve the dispute?

Yes, if the SPA provides for expert determination and defines the expert’s authority.

8. Can the buyer sue the seller over the calculation?

A commercial lawsuit or arbitration may be possible depending on the SPA’s dispute-resolution clause.

9. Can the buyer deduct the disputed amount without consent?

Only if the SPA clearly authorizes the deduction. Otherwise, unilateral withholding may create additional liability.

10. Can a foreign buyer manage the dispute without traveling to Turkey?

In many cases, yes. A Turkish lawyer may act under a valid power of attorney.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Expert Legal Support for Foreign Buyers

Working capital adjustment disputes require accurate closing-date accounting and careful compliance with the SPA’s calculation and objection procedures.

Fırat Fesih Kaya Law Office provides professional legal support to foreign buyers in completion accounts, working capital disputes, forensic accounting, expert determination, arbitration and commercial litigation.

Call: +90 312 434 22 22
WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yildirim Tower, Balgat, Cankaya, Ankara, Turkey