COST METHOD INVESTMENT
|12 Months Ended|
Dec. 31, 2016
|Investments, All Other Investments [Abstract]|
|COST METHOD INVESTMENT||
COST METHOD INVESTMENT
We hold a 15% equity interest in BVS, which is the second largest consumer and commercial credit information company in Brazil. This investment is recorded in other assets, net, on the Consolidated Balance Sheets and is accounted for using the cost method. As of December 31, 2012, our investment in BVS was valued at 130 million Brazilian Reais, which was the same as the initial fair value. The initial fair value was determined by a third-party using income, market and transaction approaches. During 2016, BVS issued new shares through which our ownership interest was diluted by approximately 1%. This dilution did not result in an impairment of our investment.
During the second quarter of 2015, we received updated management financial projections, which, along with continued weakness in the Brazilian consumer and small commercial credit markets were considered indicators of impairment. Management of Equifax prepared an analysis to estimate the fair value of our investment at June 30, 2015 and estimated that value to be 44 million Brazilian Reais ($14.1 million). As a result, we decreased the carrying value of our investment and recorded a loss at that time of 46 million Brazilian Reais ($14.8 million) which is included in other income (expense), net, in the Consolidated Statements of Income. Additionally, the carrying value has decreased by $37.1 million related to the foreign exchange impact since 2011, which is included in the foreign currency translation adjustments in accumulated other comprehensive income. As of December 31, 2016, our investment in BVS, recorded at 44 million Brazilian Reais ($13.4 million), approximated the fair value.
The entire disclosure for investments accounted for under the cost-method. The carrying amount of such investments may be adjusted, for example, distributions in excess of cost (return of capital) or for other-than-temporary impairments. The cost method and lower-of-cost or market, an adaptation of the cost method, is generally followed for most investments in noncontrolled corporations, in some corporate joint ventures, and to a lesser extent in unconsolidated subsidiaries in which the entity does not have the ability to exercise significant influence.
Reference 1: http://www.xbrl.org/2003/role/presentationRef