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LOANS RECEIVABLE, NET | 9 Months Ended
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Sep. 30, 2024
Receivables [Abstract] |
LOANS RECEIVABLE, NET | LOANS RECEIVABLE, NET The Company classifies loans receivable as “On-line merchant”, “In-store merchant”, “Consumer”, and “Credit cards”. As of September 30, 2024 and December 31, 2023, the components of current and non-current Loans receivable, net were as follows:
| September 30, 2024
| Loans receivable |  | Allowance for doubtful accounts |  | Loans receivable, net
| (In millions)
On-line merchant | $ | 495 |  |  | $ | (140) |  |  | $ | 355 |
In-store merchant | 673 |  |  | (253) |  |  | 420 |
Consumer | 2,504 |  |  | (732) |  |  | 1,772 |
Credit cards | 2,344 |  |  | (487) |  |  | 1,857 |
Total | $ | 6,016 |  |  | $ | (1,612) |  |  | $ | 4,404 |
| December 31, 2023
| Loans receivable |  | Allowance for doubtful accounts |  | Loans receivable, net
| (In millions)
On-line merchant | $ | 429 |  |  | $ | (119) |  |  | $ | 310 |
In-store merchant | 332 |  |  | (137) |  |  | 195 |
Consumer | 1,808 |  |  | (592) |  |  | 1,216 |
Credit cards | 1,209 |  |  | (236) |  |  | 973 |
Total | $ | 3,778 |  |  | $ | (1,084) |  |  | $ | 2,694 |
The allowance for doubtful accounts with respect to the Company’s loans receivable amounts to $1,637 million and $1,102 million as of September 30, 2024 and December 31, 2023, respectively, which includes $25 million and $18 million related to unused agreed loan commitment on credit cards portfolio presented in Other liabilities of the interim condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024 and December 31, 2023, the Company is exposed to off-balance sheet unused agreed loan commitments on credit cards portfolio, which expose the Company to credit risks for $2,498 million and $934 million, respectively. For the nine and three-month periods ended September 30, 2024, the Company recognized in provision for doubtful accounts $9 million and $5 million as expected credit losses, and $5 million and $2 million for the same periods in 2023, respectively. The Company closely monitors credit quality for all loans receivable on a recurring basis to assess and manage its exposure to credit risk. To assess merchants and consumers seeking a loan under the Mercado Credito solution, the Company uses, among other indicators, risk models internally developed as a credit quality indicator to help predict the merchant’s and consumer’s ability to repay the principal balance and interest related to the credit. The risk model uses multiple variables as predictors of the merchant’s and consumer’s ability to repay the credit, including external and internal indicators. Internal indicators consider user behavior related to credit/payment history, and with lower weight in the risk models, the Company uses the number of transactions in the Company’s ecosystem and the merchant’s annual sales volume, among other indicators. In addition, the Company considers external bureau information to enhance the model and the decision making process. The amortized cost of the loans receivable classified by the Company’s credit quality internal indicator was as follows:
| September 30, 2024 |  | December 31, 2023
| (In millions)
1-14 days past due | $ | 178 |  |  | $ | 99 |
15-30 days past due | 138 |  |  | 92 |
31-60 days past due | 180 |  |  | 114 |
61-90 days past due | 149 |  |  | 103 |
91-120 days past due | 154 |  |  | 111 |
121-150 days past due | 143 |  |  | 97 |
151-180 days past due | 144 |  |  | 82 |
181-210 days past due | 134 |  |  | 76 |
211-240 days past due | 128 |  |  | 74 |
241-270 days past due | 111 |  |  | 69 |
271-300 days past due | 91 |  |  | 59 |
301-330 days past due | 91 |  |  | 74 |
331-360 days past due | 82 |  |  | 66 |
Total past due | 1,723 |  |  | 1,116 |
To become due | 4,293 |  |  | 2,662 |
Total | $ | 6,016 |  |  | $ | 3,778 |
As of September 30, 2024 and December 31, 2023, renegotiations represented 1.5% and 2.8% of the loans receivable portfolio, respectively. The following tables summarize the allowance for doubtful accounts activity during the nine-month periods ended September 30, 2024 and 2023:
| September 30, 2024
| On-line merchant |  | In-store merchant |  | Consumer |  | Credit cards |  | Total
| (In millions)
Balance at beginning of year | $ | 119 |  |  | $ | 137 |  |  | $ | 592 |  |  | $ | 236 |  |  | $ | 1,084 |
Net charged to Net Income | 107 |  |  | 221 |  |  | 575 |  |  | 406 |  |  | 1,309 |
Currency translation adjustments | (6) |  |  | (14) |  |  | (37) |  |  | (39) |  |  | (96) |
Write-offs (1) | (80) |  |  | (91) |  |  | (398) |  |  | (116) |  |  | (685) |
Balance at end of period | $ | 140 |  |  | $ | 253 |  |  | $ | 732 |  |  | $ | 487 |  |  | $ | 1,612 |
| September 30, 2023
| On-line merchant |  | In-store merchant |  | Consumer |  | Credit cards |  | Total
| (In millions)
Balance at beginning of year | $ | 120 |  |  | $ | 145 |  |  | $ | 614 |  |  | $ | 225 |  |  | $ | 1,104 |
Net charged to Net Income | 81 |  |  | 93 |  |  | 417 |  |  | 140 |  |  | 731 |
Currency translation adjustments | 3 |  |  | — |  |  | 9 |  |  | 10 |  |  | 22 |
Write-offs (1) | (84) |  |  | (111) |  |  | (467) |  |  | (171) |  |  | (833) |
Balance at end of period | $ | 120 |  |  | $ | 127 |  |  | $ | 573 |  |  | $ | 204 |  |  | $ | 1,024 |
(1) The Company writes off loans when customer balance becomes 360 days past due.

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- Definition The entire disclosure for claims held for amounts due to entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/310-10/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 + Details
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