How did the auditors test Budget's recoverability test?

Our audit procedures related to impairment of long-lived assets of United States vehicles included the following, among others:

• We tested the effectiveness of controls over (1) management's identification of events or changes in circumstances that indicate that the carrying amount of vehicles may not be recoverable, including management's review of forecasted future cash flows, and (2) management's review of the methodology in determining the fair value estimate of vehicles.
• We evaluated whether management appropriately identified events or changes in circumstances that indicated that the carrying amounts of vehicle assets may not be recoverable.
• We evaluated management's determination of asset groups at the lowest level of identifiable cash flows.
• We tested management's recoverability test by comparing the sum of undiscounted cash flows expected to result from the use and eventual disposition of the impacted vehicles to their carrying value by performing the following:
  • Tested the mathematical accuracy of management's analysis.
  • Compared relevant information to historical data.
  • Assessed management's assumptions used when determining the expected rental revenue, operating expenses and residual values expected at the time of disposition of vehicles as part of their recoverability test.
• We tested the fair value estimates for the impacted vehicles.
• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology applied and fair value determined for vehicles by testing the methodology applied and measurable inputs used, and the mathematical accuracy of the calculation.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)