Financial Assets and Liabilities

12 Months Ended

Dec. 31, 2019

19. 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, 2018 and 2019:


	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.	—

	December 31, 2019
	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.	10,145,615	Ps.	—	Ps.	37,572,410
Accounts receivable from subscribers, distributors, contractual assets and other		196,217,010		—		—
Related parties		1,273,140		—		—
Derivative financial instruments		—		6,825,760		—

Total	Ps.	207,635,765	Ps.	6,825,760	Ps.	37,572,410

Financial Liabilities:
Debt	Ps.	624,254,477	Ps.	—	Ps.	—
Liability related to right-of-use of assets		120,596,733		—		—
Accounts payable		216,112,824		—		—
Related parties		3,460,419		—		—
Derivative financial instruments		—		9,596,751		—

Total	Ps.	964,424,453	Ps.	9,596,751	Ps.	—

air 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, 2018 and 2019 is as follows:


	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


	Measurement of fair value at December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Equity investments at fair value through OCI and other short-term investments	Ps.	37,572,410	Ps.	10,145,615	Ps.	—	Ps.	47,718,025
Derivative financial instruments		—		6,825,760		—		6,825,760
Pension plan assets		185,981,861		20,294,557		24,404		206,300,822

Total	Ps.	223,554,271	Ps.	37,265,932	Ps.	24,404	Ps.	260,844,607

Liabilities:
Debt	Ps.	582,003,256	Ps.	101,667,421	Ps.	—	Ps.	683,670,677
Liability related to right-of-use of assets		120,596,733		—		—		120,596,733
Derivative financial instruments		—		9,596,751		—		9,596,751

Total	Ps.	702,599,989	Ps.	111,264,172	Ps.	—	Ps.	813,864,161

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 (loss) related to derivative financial instruments for the years ended December 31, 2018 and 2019 was Ps. 5,286,290 and Ps. (1,774,932) respectively.

For the years ended December 31, 2018 and 2019, no transfers were made between Level 1 and Level 2 fair value measurement hierarchies.

Changes in liabilities arising from financing activities


	At December 31, 2017		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

At December 31,
2018

At January 1,

2019

Cash flow

Foreign currency
exchange and
other

At December 31,
2019

Debt

Ps. 638,922,453

Ps. —

Ps. 8,273,440

Ps. (22,941,416

)

Ps. 624,254,477

Liability related to

right-of-use

of assets

—

119,387,660

(26,765,075

)

27,974,148

120,596,733

Total liabilities from financing activities

Ps. 638,922,453

Ps. 119,387,660

Ps. (18,491,635)

Ps. 5,032,732

Ps. 744,851,210