Purchase price adjustments capture the change in value of an asset typically between the negotiation and closing.
Following the closing, Antonio approached Shylock, upset that the property was in fact worth only $42,000.
After a few weeks of negotiations, the parties agreed to reduce the amount of the promissory note to $32,000.
[1] A Purchase Price Adjustment is not included as gross income under the U.S. tax code.
Additionally, the price adjustment has to exist between the seller and the buyer (no third parties can be involved).