Summary
Trane Technologies plc (TT), formerly Ingersoll-Rand plc, announced a significant accounting adjustment related to its Venezuelan subsidiary in an 8-K filing dated April 13, 2015. The company has decided to adopt the Marginal Currency System (SIMADI) rate for translating its Venezuelan subsidiary's financial position as of March 31, 2015. This change in accounting treatment is expected to result in a pre-tax charge of approximately $42.6 million, which will be recorded within "Other income/(expense), net" for the first quarter of 2015. This charge stems from the remeasurement of monetary assets due to currency fluctuations in Venezuela. Investors should note that while this charge impacts the first quarter's reported earnings, it is an accounting adjustment and does not reflect a change in the underlying operational performance of the company's Venezuelan business. The company reported that its Venezuelan subsidiary's annual net revenues for 2014 were approximately 300 million Bolivars, providing some context for the scale of the subsidiary's operations.
Key Highlights
- 1Trane Technologies plc (TT) filing an 8-K on April 13, 2015.
- 2Company to utilize the Marginal Currency System (SIMADI) rate for Venezuelan subsidiary's financial translation.
- 3This accounting change impacts the first quarter financial statements for the period ending March 31, 2015.
- 4A pre-tax charge of $42.6 million will be recorded due to remeasurement of monetary assets.
- 5The charge will be classified under 'Other income/(expense), net'.
- 6Venezuelan subsidiary's 2014 annual net revenues were approximately 300 million Bolivars.