An international Fortune 500 food and beverage company engaged the DLC team for support and validation on their global 5-year Strategic Plan projections, which serve as the basis for valuation of their Goodwill. These forecasts were performed by 50+ business units and over 25 brands across 8 identified regions across the world.
The client’s balance sheet was 80% Goodwill and Intangibles, which required them to perform an evaluation of impairment on an annual basis and served as one of the most critical components of their external audit.
- With DLC’s direction, the client wanted to reduce the time for final review with external auditors to complete their final assessment.
- With a tight deadline for completion, the DLC team jumped into the project quickly to learn the client’s processes and models.
After evaluating the current state, DLC learned they would be faced with managing new tools for the impairment process, establishing relationships with new staff after the client experienced turnover, and collaborating with three external teams. Throughout the duration of the project, the client’s requirements changed, which expanded the scope of the end product and pushed DLC’s consultants to be agile and adaptable.
The DLC Approach
A project plan was created by business unit and brand to ensure timely completion. As part of the 14-week engagement, DLC worked directly with client teams across the globe to examine 5-year Strategic Plan projections and bridges, as well as comparing the prior year forecasts to the current year projections.
In preparation for final evaluation by external auditors, DLC’s team assisted in the completion of the year-over- year explanations and ensured the proper level of support for bridges so the headquarters team and other external partners could streamline their final evaluations.
In addition, DLC supported the accuracy of the third-party valuation reports by rolling forward the prior year report to the current year report by component, ensuring the client’s understanding of the impact of each driver.
- Developed a project plan outlined by business unit and brand for the client and assigned it to the DLC project team for execution.
- Established a PMO process to streamline communications between the client, external partners and the international company’s business units.
- Created process documentation to ensure all work was completed and documented in a consistent manner for future use.
- Established a project tracking system to proactively address any concerns with the project, process, or people and to provide transparency on the project progress and key milestones.
DLC executed the project at a cost approximately 25-35% under the client’s expense for goodwill impairment in their prior fiscal year. By strategizing an overall project plan and path for execution, as well as PMO components and process documentation, DLC provided the client with invaluable tools and procedures to execute an efficient and streamlined goodwill impairment project in the future.
With a superior end-product and direct assistance, the international food and beverage company was able to successfully gain the overall goodwill impairment valuation and forecast validation in a compressed timeframe.