due diligence

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Due diligence

An internal audit of a target firm by an acquiring firm. Offers are often made contingent upon resolution of the due diligence process.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Due Diligence

The investigation of an asset, investment, or anything else to ensure that everything is as it seems. Due diligence helps a buyer or investor make sure that there are no unexpected problems with the asset or investment and that he/she does not overpay. Due diligence can be a complex and formalized process in the acquisition of a company. Even when buying a house, for example, due diligence involves time consuming and at times expensive endeavors, like a home inspection. However, due diligence is seen as a necessary part of doing business or buying an asset. See also: 10-K, Due diligence meeting.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

due diligence

The process of investigating all facts,conditions,rules,laws,regulations,financial considerations, or any other such matters as would affect one's decision to purchase property. The various types of investigations as would comprise due diligence will vary from property to property. With the purchase of a home, it might include nothing more than a home inspection, termite report, and a review of any restrictive covenants.When purchasing raw land for development, it could include zoning issues, possible environmental contamination, surveys, soil compaction studies, analysis of cost to develop versus value when completed, and so on as far as the imagination can go.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Due dilligence. A lot of business these days is grown through merger and acquisition.
Time Inc.'s Risa Turken says there's a much higher level of due dilligence involved in a service relationship, and that questions of indemnity become more crucial than on a product deal.
During that time the consortium will conduct a second due dilligence process and negotiate a social package with the trade unions.
The deal, worth pounds 1.59 billion, collapsed during due dilligence and the demerger proceeded.
The price has been settled but was undisclosed to beneficiaries pending due dilligence and a final contract.
Make sure he has done his homework and due dilligence on anything he might be trying to get you to invest in.
Business takeaway: Do your due dilligence before embarking on a partnership with a stranger.
The club are currently going through the process of examining each candidate to replace Alan Pardew and are carrying out due dilligence.
A fear due dilligence had not been able to be properly carried out on the SPL's contractual agreements and finances was a big influence on proceedings.
The bank's deputy CEO, Herbert Moos, then stated that VTB would carry out the due dilligence procedure and decide on the price in the first quarter of 2011.