Captive seeks expert validation around calculation of its casualty and termination values

SITUATION

A captive finance company was redesigning its lease accounting system and needed to replicate the casualty and termination (C&T) values produced by the legacy system. Given the economic importance of these computations, the company required resources familiar with C&T values to determine the reasonableness of its proposed approach. The Alta Group had served this client in the past and possessed the in-depth knowledge of what the computations should accomplish for the client’s purposes.

SOLUTION

Alta identified possible approaches to determining C&T values and considered whether the company’s approach was within the bounds of the industry standard. We then reviewed the company’s template for calculating C&T values and tested the computations. After our testing phase, we determined the company’s approach produced an output equivalent to the output produced by the legacy system.