Adjustment for Prepaid Expenses Sample Clauses
The Adjustment for Prepaid Expenses clause defines how prepaid costs, such as insurance premiums or service contracts paid in advance, are handled between parties during a transaction, typically at closing. It specifies that any prepaid expenses benefiting the period after the transaction date will be prorated, with the buyer reimbursing the seller for the unused portion. This ensures that each party pays only for the benefits they actually receive, preventing disputes over who is responsible for costs that extend beyond the transfer of ownership.
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Adjustment for Prepaid Expenses. All Prepaid Expenses relating to the Owned Branches, transferred at Closing, shall be prorated between the parties. To the extent that Seller has Prepaid Expenses that are expenses allocable to Purchaser pursuant to this Section 2.2, such expenses shall appear as an Asset on the Preliminary Closing Statement and the Final Closing Statement. To the extent that Prepaid Expenses have been accrued and not paid by Seller or prepaid by customers prior to the Closing Date, they shall appear as a Liability on the Preliminary Closing Statement and the Final Closing Statement.
Adjustment for Prepaid Expenses. All Prepaid Expenses relating to the Branches, transferred at Closing, shall be prorated between the parties as of the Closing Date on the basis of a 365-day year. To the extent that Seller has Prepaid Expenses that are expenses allocable to Purchaser pursuant to this Section 2.3, such expenses shall appear as an Asset on the Preliminary Closing Statement and the Final Closing Statement. To the extent that Prepaid Expenses have been accrued and not paid by Seller or prepaid by customers prior to the Closing Date, they shall appear as a Liability on the Preliminary Closing Statement and the Final Closing Statement.