Which approach is primarily suggested for assessing the effectiveness of a notional pooling structure?

The approach of evaluating the net benefit against individual subsidiary interest payments is essential for assessing the effectiveness of a notional pooling structure. This method allows businesses to measure the financial advantages that arise from pooling funds across different subsidiaries. By comparing the overall benefits gained from reduced interest expenses allowed by notional pooling against what each subsidiary would typically pay individually, organizations can gain a clearer understanding of the value added by the pooling arrangement.

This assessment not only highlights potential cost savings but also takes into account the overall efficiency and enhanced cash flow management achieved through notional pooling. It reflects a comprehensive analysis that considers both costs and benefits, providing a clearer picture of the financial impact and helping organizations decide on the efficacy of their pooling strategy.