A QoE-light is the smallest defensible financial DD scope for a sub-£10m EV bolt-on. It validates the EBITDA bridge, documents the normalisations, builds the working-capital twelve-month average and locks the net-debt definition. It does not extend to full statutory-audit-style assurance.

Schedule II Financial - QoE-relevant clauses

• II.1

  Obtain audited statutory accounts for the last three financial years.

  Severity A
• II.2

  Obtain management accounts to the most recent month-end (P&L, balance sheet, cash flow).

  Severity A
• II.3

  Tie management accounts back to audited results; explain any variance > 2%.

  Severity A
• II.4

  Obtain trial balance and chart of accounts; map to FDD reporting structure.

  Severity B
• II.5

  Test revenue recognition policy against FRS 102 or IFRS 15 as applicable.[FRC]

  Severity A
• II.6

  Identify and quantify all QoE adjustments (non-recurring, owner remuneration, normalisations).

  Severity A
• II.7

  Build a working-capital normalisation: 12-24 month average, seasonality, day-count.

  Severity A
• II.8

  Define net debt: cash, debt, debt-like items, IFRS 16 lease liabilities, deferred consideration.

  Severity A
• II.9

  Obtain monthly KPI pack (volume, ASP, margin) for the last 24 months.

  Severity B
• II.10

  Test gross-margin walk by product/service line; identify mix-shift effects.

  Severity B
• II.11

  Reconcile bank statements to ledger cash for each period-end.

  Severity B
• II.12

  Obtain debtor and creditor ageing; test for overdue balances and concentration.

  Severity B
• II.13

  Identify any factored or invoice-financed receivables and recourse position.

  Severity B
• II.14

  Confirm bad-debt provisioning policy and movement over the period.

  Severity C
• II.15

  Obtain stock listings; test NRV and slow-moving / obsolete provisioning.

  Severity B
• II.19

  Obtain forecast model (P&L, balance sheet, cash flow) for the next 24 months.

  Severity B
• II.21

  Identify any post-period-end trading variance vs forecast.

  Severity A
• II.22

  Confirm cut-off testing: revenue, costs and stock at each period-end.

  Severity B
• II.23

  Identify any change in accounting policy, estimate or judgement during the period.

  Severity B
• II.25

  Confirm any covenant compliance reporting to lenders and headroom on each test date.

  Severity A

Tax-DD overlap

• III.1

  Obtain corporation-tax computations and CT600 returns for the last six years.[CTA 2009]

  Severity A
• III.2

  Identify any open HMRC enquiries, discovery assessments or pending litigation.

  Severity A
• III.5

  Review R&D tax-credit claims: methodology, supporting file, advance assurance.[HMRC R&D]

  Severity A
• III.13

  Review employment-related securities (ERS) returns, EMI option grants and 90-day notifications.

  Severity A
• III.14

  Confirm EMI option grants meet qualifying-trade and individual-limit conditions.

  Severity A
• III.15

  Identify any disguised-remuneration or loan-charge exposures.

  Severity A