When a Judge in Mexico ruled against Yahoo with a massive $2.7 billion judgment, the Internet company may have lost more than the case; it also lost some credibility on its financial reporting.
Yahoo announced in late November that it was facing the massive penalty as a result of lawsuit in Mexico it lost against a yellow pages listing service company. To be sure, companies win and lose lawsuits all the time, and Yahoo is unlikely to shell out anywhere near that figure, as it plans to “vigorously defend itself” during the appeals process. The real problem, however, was the fact that the case exposed holes in Yahoo’s loss contingency disclosure policies.
