Cost Allocation and Economic Damages in Litigation - Barge vs. Railroad

• In Event: Teaching Methods II

Abstract

Based upon an actual case, students are asked to review the report of a forensic accountant in relation to damages involving a barge striking a railroad bridge during flooding on the Mississippi. Students are required to review a copy of the actual invoice sent by the railroad to the barge company. In reviewing the invoice, it is necessary to analyze the costs and cost allocation method. All of the material necessary to tie the invoice amounts to the report of the public information provided by the railroad is presented. Students are asked to follow the process used by the railroad to allocate costs with a single cost driver and determine how they would testify in court. In addition, they can be asked for way to improve the calculation of economic damages.
The presentation will be taken from an actual case heard in the District Court - Central District of Illinois Rock Island Division. Copies of the Forensic Accounts reports, various exhibits and court transcripts are available for students use.

Author

• Karen Grossman Tabak, Maryville University