Non-recurring expenses

Non-recurring expenses are costs that are one-off in nature, outside the normal operating cycle, and therefore not representative of sustainable earnings — restructuring charges, litigation settlements, M&A advisory fees, asset write-downs, extraordinary losses. In financial due diligence and valuation, they are systematically restated to build a normalised EBITDA. The boundary between recurring and non-recurring is frequently contested between buyer and seller — at a 7x EBITDA multiple, each CHF 100,000 of restatement represents CHF 700,000 of enterprise value, making precise documentation essential.

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Example: a company presents non-recurring charges of CHF 180,000, CHF 95,000 and CHF 220,000 over three years — a CHF 165,000 annual average. The buyer argues this regularity makes them quasi-operational and proposes a 50% restatement. A compromise at CHF 82,500 is documented with supporting evidence for each item — reducing a potential CHF 1.15 million valuation dispute to an agreed CHF 577,500 adjustment.

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Hectelion documents and defends every non-recurring expense restatement with supporting evidence, producing normalised EBITDA conclusions that withstand counterparty challenge.