In conjunction with Stout's Business Valuation team, we determined the accounting treatment of certain default provisions embedded within the debt of a publicly traded heavy equipment manufacturer.  We determined that a default escalation clause resulted in an embedded derivative within the debt agreement that was required to be fair valued and accounted for separately as a mark-to-market derivative. We provided accounting documentation to support discussions with the company’s auditor and to direct the efforts of our complex securities valuation team.