Deferred consideration

Consideration for the sale of an asset that is (or may be) payable at some point in the future, rather than the date on which completion of the transaction takes place. The term is most commonly used in connection with corporation transactions (such as a share or business sale).

Deferred consideration can be a fixed amount payable on a specified date (or in a series of instalments), or contingent on a future event (such as an earn-out).

For further information, see Practice note, Structuring the purchase price: acquisitions: Deferred consideration (payment by instalments) and Earn-outs.