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MercadoLibre to change Venezuelan forex accounting, record charge

  • Going forward, MercadoLibre (MELI) won't use Venezuela's SICAD 1 floating exchange rate (currently 10 bolivars per U.S. dollar) to account for local transactions, and will instead rely on the SICAD 2 rate (currently 50 bolivars per dollar).
  • Mercado notes it's unable to access the SICAD 1 rate, and is more likely to settle transactions at the SICAD 2 rate. The company's Venezuelan forex accounting has frequently come under heavy criticism.
  • A $47M-$57M re-measurement charge will be recorded in Q2, as will  a $14.5M-$21.5M forex loss and a $6.5M-$9.5M deferred income tax gain. Venezuelan revenue is expected to be impacted by $12M-$18M.
  • The announcement comes a day after eBay launched Spanish/Portuguese-language sites for Latin American shoppers.
  • MELI -0.5% AH.
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Comments (1)
  • Yaron Ron Reuven
    , contributor
    Comments (465) | Send Message
     
    Finally company is admitting or at least coming to terms with the account in fakery they've implemented.
    16 May 2014, 04:57 PM Reply Like
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