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 ?
Even if an early-stage company has limited resources or cannot possibly evaluate every potential issue, it is still important to conduct some advance preparation so the company can either provide answers or identify a path to developing them when due diligence issues arise at the deal table.
Why is Due Diligence indispensable in the Middle East?
Three months may not be enough for full-scale due diligence."
In performance, due diligence audits are very similar to any other audits.
However, not all of these areas will necessarily be looked at - and, depending on what PCP Capital Partners or any other group which enters the due diligence process wants to discover, there could be greater scrutiny over certain areas as opposed to others.
Failing to make a due diligence checklist is perhaps the worst mistake you can make when buying real estate.
6695(g) to exercise due diligence when preparing returns claiming the credit.
Due diligence should not be performed for the sake of filling lonely file cabinets, but instead should be reviewed and followed-up on if there are gaps or red flags.
Accordingly, another factor to help determine economics/value and use is the due diligence factor, e.g., assessing what the asset is and what it isn't.
In that instance, compliance due diligence should be expanded to evaluate applicable foreign regulations such as the European Union's Restriction of the use of certain Hazardous Substances (RoHS) and sanctions, including embargoes and trade restrictions.
O'Brien said: "This will be Due Diligence's first time taking on the older sprinters.
Manjoo stressed that there was a need to create a framework for discussing the responsibility of States to act with due diligence, through separating that standard into two categories: individual due diligence which States owe to individual victims of violence, and systemic due diligence which requires States obligations to create a functioning system to eliminate violence against women.