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, 2017 and 2018:


	December 31, 2017
	Loans and Receivables		Fair value through profit or loss		Fair value through OCI
Financial Assets:
Equity investments at fair value through OCI and other short term investments	Ps.	12,438,019	Ps.	—	Ps.	46,682,657
Accounts receivable from subscribers, distributors, contractual assets and other		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.	—

December 31, 2018

Loans and
Receivables

Fair value
through
profit or loss

Fair value
through OCI

Financial Assets:

Equity investments at fair value through OCI and other short term investments

Ps.

9,987,851

Ps.

—

Ps.

39,028,083

Accounts receivable from subscribers, distributors, contractual assets and other

185,202,494

—

Related parties

1,263,605

—

Derivative financial instruments

—

5,287,548

—

Total

Ps.

196,453,950

Ps.

5,287,548

Ps.

39,028,083

Financial Liabilities:

Debt

Ps.

638,922,453

Ps.

—

Ps.

—

Accounts payable

221,957,267

—

Related parties

2,974,213

—

Derivative financial instruments

—

17,107,579

—

Total

Ps.

863,853,933

Ps.

17,107,579

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, 2017 and 2018 is as follows:


	Measurement of fair value at December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Equity investments at fair value through OCI 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

Measurement of fair value at December 31, 2018

Level 1

Level 2

Level 3

Total

Assets:

Equity investments at fair value through OCI and other short-term investments

Ps.

39,028,083

Ps.

9,987,851

Ps.

—

Ps.

49,015,934

Derivative financial instruments

—

5,287,548

—

5,287,548

Pension plan assets

186,557,731

17,096,344

17,047

203,671,122

Total

Ps.

225,585,814

Ps.

32,371,743

Ps.

17,047

Ps.

257,974,604

Liabilities:

Debt

Ps.

594,713,342

Ps.

99,723,251

Ps.

—

Ps.

694,436,593

Derivative financial instruments

17,107,579

—

17,107,579

Total

Ps.

594,713,342

Ps.

116,830,830

Ps.

—

Ps.

711,544,172

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 equity investments at fair value, specifically the investment in KPN, is valued using the quoted prices (unadjusted) in active markets for identical assets. The net realized gain related to derivative financial instruments for the years ended December 31, 2017 and 2018 was Ps. 1,515,668 and Ps. 5,286,290, respectively.

For the years ended December 31, 2016, 2017 and 2018, no transfers were made between Level 1 and Level 2 fair value measurement hierarchies.

Changes in liabilities arising from financing activities

At January 1,
2017

Cash flow

Foreign 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

At January 1,
2018

Cash flow

Foreign currency
exchange and
other

At December 31,
2018

Total liabilities from financing activities

Ps.

697,884,899

Ps.

(34,050,923

)

Ps.

(24,911,523

)

Ps.

638,922,453