EXPENSE SHARING METHODOLOGY Sample Clauses

EXPENSE SHARING METHODOLOGY. MCFC provides support services to the Subsidiaries and the Subsidiaries provide services to MCFC and to each other. Three reimbursement methods are used for expenses, including: (a) Direct Expenses. Direct expenses incurred by MCFC or any of the Subsidiaries will be borne by the Party or Parties that incurred the expense and/or benefited from goods and/or services attributable to such expense. Direct expenses are expenses that can be specifically identified to a Party, yet are paid centrally, usually at the MCFC level. Direct expenses will be charged to the appropriate Party at the time the expense is paid or incurred. For example, external audit expenses, payroll expenses, and other similar directly charged expenses are considered direct expenses. These expenses are generally paid through the monthly intercompany transaction process for reimbursement/expense. (b) Direct Cost Allocations. Direct cost allocations are expenses that are incurred for the benefit of MCFC or the Subsidiaries that are not direct expenses. They are considered cost reimbursements and will be based on the estimated use of services using a reliable indicator of such cost (e.g., hours spent based on historical information, number of tax returns prepared, headcount, space utilized, etc.). Since exact costs may not be able to be determined at the time of the reimbursement or at the time budgets are prepared, costs will be allocated based on the most accurate information available with an emphasis on fairness and accuracy, and based on what reasonable third parties would agree is a reasonable cost allocation of mutually borne costs. For example, internal audit expenses, which would be charged to the Subsidiaries based on hours of time incurred on that Party’s behalf, are considered direct cost allocations.