Fiducia TogetherNormalised earnings
Adjusting the accounts to show what the business really earns.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
Normalisation adjusts reported profit for one-off items, owner's remuneration above or below market rate, non-business costs and related-party transactions.
Why it matters
It is the figure a buyer applies a multiple to, so every pound of defensible adjustment is worth a multiple of itself in price.
What it looks like in practice
Common adjustments: owner's salary to market rate, personal costs run through the business, one-off legal or restructuring costs, and rent paid to a related party at a non-market rate.
What to watch out for
Adjustments you cannot evidence. A buyer will accept documented ones and discount asserted ones, and asserting too many undermines the credible ones.
Where to get proper advice
An accountant with transaction experience, well before going to market.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.