Earn-out modelling LBO
Hi, if the sponsor pays an extra x$ through the holding period as earn-out to the seller, how do i model this correctly given min cash balance and full?
Tried plugging it into theflow from investing, but BS doesnt balance (debt just lower however asset side stays the same).
Do I have to model a contingent liability (thought this is only modelled if earn-out is part of the initial transaction value, e.g. if only 80% paid at closing)