18. Financial Assets and Liabilities

Set out below is the categorization of the financial instruments, excluding cash and cash equivalents, held by the Company as of December 31, 2016 and 2017:

December 31, 2016

Loans and
Receivables

Fair value
through
profit or loss

Fair value
through OCI

Financial Assets:

Available for sale marketable securities and other short term investments

Ps.

13,393,646

Ps.

—

Ps.

41,463,511

Accounts receivable from subscribers, distributors,
and other, net

175,059,881

—

Related parties

740,492

—

Derivative financial instruments

—

909,051

—

Total

Ps.

189,194,019

Ps.

909,051

Ps.

41,463,511

Financial Liabilities:

Debt

Ps.

707,801,403

Ps.

—

Ps.

—

Accounts payable

237,265,126

—

Related parties

2,971,325

—

Derivative financial instruments

—

17,504,910

79,837

Total

Ps.

948,037,854

Ps.

17,504,910

Ps.

79,837

December 31, 2017

Loans and
Receivables

Fair value
through
profit or loss

Fair value
through OCI

Financial Assets:

Available for sale marketable securities and other short term investments

Ps.

12,438,019

Ps.

—

Ps.

46,682,657

Accounts receivable from subscribers, distributors,
and other, net

163,085,537

—

Related parties

868,230

—

Derivative financial instruments

—

8,037,384

Total

Ps.

176,391,786

Ps.

8,037,384

Ps.

46,682,657

Financial Liabilities:

Debt

Ps.

697,884,899

Ps.

—

Ps.

—

Accounts payable

212,673,407

—

Related parties

2,540,412

—

Derivative financial instruments

—

14,359,460

—

Total

Ps.

913,098,718

Ps.

14,359,460

Ps.

—

Fair value hierarchy

The Company’s valuation techniques used to determine and disclose the fair value of its financial instruments are based on the following hierarchy:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Variables other than quoted prices in Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and

Level 3: Variables used for the asset or liability that are not based on any observable market data (non-observable variables).

The fair value for the financial assets (excluding cash and cash equivalents) and financial liabilities shown in the consolidated statements of financial position at December 31, 2016 and 2017 is as follows:

Measurement of fair value at December 31, 2016

Level 1

Level 2

Level 3

Total

Assets:

Available for sale marketable securities and other short term investments

Ps.

41,463,511

Ps.

13,393,646

Ps.

—

Ps.

54,857,157

Derivative financial instruments

—

909,051

—

909,051

Pension plan assets

214,051,693

8,175,469

118,459

222,345,621

Total

Ps.

255,515,204

Ps.

22,478,166

Ps.

118,459

Ps.

278,111,829

Liabilities:

Debt

Ps.

666,457,233

Ps.

80,214,836

Ps.

—

Ps.

746,672,069

Derivative financial instruments

—

17,584,747

—

17,584,747

Total

Ps.

666,457,233

Ps.

97,799,583

Ps.

—

Ps.

764,256,816

Measurement of fair value at December 31, 2017

Level 1

Level 2

Level 3

Total

Assets:

Available for sale marketable securities and other short term investments

Ps.

46,682,657

Ps.

12,438,019

Ps.

—

Ps.

59,120,676

Derivative financial instruments

—

8,037,384

—

8,037,384

Pension plan assets

218,518,358

9,039,270

130,976

227,688,604

Total

Ps.

265,201,015

Ps.

29,514,673

Ps.

130,976

Ps.

294,846,664

Liabilities:

Debt

Ps.

691,769,785

Ps.

63,147,153

Ps.

—

Ps.

754,916,938

Derivative financial instruments

—

14,359,460

—

14,359,460

Total

Ps.

691,769,785

Ps.

77,506,613

Ps.

—

Ps.

769,276,398

Fair value of derivative financial instruments is valued using valuation techniques with market observable inputs. To determine its Level 2 fair value, the Company applies different valuation techniques including forward pricing and swaps models, using present value calculations. The models incorporate various inputs including credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves. Fair value of debt Level 2 has been determined using a model based on present value calculation incorporating credit quality of AMX. The Company’s investment in available for sale securities, specifically the investment in KPN, is valued using the quoted prices (unadjusted) in active markets for identical assets. The net realized losses related to derivative financial instruments for the years ended December 31, 2016 and 2017 was Ps. 28,878,632 and Ps.1,515,668, respectively.

For the years ended December 31, 2015, 2016 and 2017, no transfers were made between Level 1 and Level 2 fair value measurement hierarchies.

Changes in liabilities arising from financing activities

At January 1,
2016

Cash flow

Foreing currency
exchange and
other

At December 31,
2016

Total liabilities from financing activities

Ps.

683,216,744

Ps.

(61,390,813

)

Ps.

85,975,472

Ps.

707,801,403

At January 1,
2017

Cash flow

Foreing currency
exchange and
other

At December 31,
2017

Total liabilities from financing activities

Ps.

707,801,403

Ps.

(27,433,489

)

Ps.

17,516,985

Ps.

697,884,899