Affiliate Cost Allocation Review

Project Brief

Atrium was retained by a Canadian Energy Company to review its methodology for allocating shared costs across the multiple affiliates within the holding company. Atrium interviewed all relevant business units within the holding company and developed a cost allocation model to ensure the client’s approach complied with the Ontario Energy Board’s Affiliate Relationship Code requirements.

CHALLENGE

Since the inception of this clients affiliate cost allocations, several entity-wide changes have occurred which support a review and update of the current affiliate cost allocation functions and services provided.

EXPERTISE

Atrium utilized its expertise and knowledge in affiliate cost allocation best practices and the requirements of the Ontario Energy Board’s Affiliate Relationship Code requirements to develop a solution for the client. This involved reviewing the functions and services provided to and by each of it’s business entities, developing and assigning cost drivers reflecting cost causation for each business unit’s functions, and allocating all affiliate costs to the responsible business units.

OUTCOME

Through interviews with over 20 business units, Atrium developed a cost allocation model that could be implemented now and updated to accommodate future organizational changes. Atrium’s work product will streamline the process of reporting their affiliate cost allocations to the Ontario Energy Board in the future.

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