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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2019
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Summary of Composition of Income Tax Expense
The composition of income tax expense for the years ended December 31, 2017, 2018 and 2019 is as follows:
 
 
  
2017
 
 
2018
 
 
2019
 
In Mexico:
  
   
 
   
 
   
Current year income tax
  
Ps.
16,568,274
 
 
Ps.
 28,572,414
 
 
Ps.
 26,295,431
 
Deferred income tax
  
 
2,582,287
 
 
 
(2,688,727
) 
 
 
208,658
 
Foreign:
  
   
 
   
 
   
Current year income tax
  
 
13,524,729
 
 
 
19,898,728
 
 
 
20,843,720
 
Deferred income tax
  
 
(7,733,779
) 
 
 
694,664
 
 
 
3,685,724
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
  
Ps.
24,941,511
 
 
Ps.
46,477,079
 
 
Ps.
51,033,533
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Summary of Deferred Tax Related to Items Recognized in OCI
 
 
  
For the years ended December 31,
 
 
  
2017
 
 
2018
 
 
2019
 
Remeasurement of defined benefit plans
  
Ps.
3,032,403
 
 
Ps.
408,735
 
 
Ps.
9,217,320
 
Effect of financial instruments acquired for hedging purposes
  
 
(5,337
) 
 
   
 
   
Equity investments at fair value
  
 
(266,753
) 
 
 
  1,613,667
 
 
 
(378,606
) 
Other
  
 
—  
 
 
 
(8,922
) 
 
 
—  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Deferred tax benefit (expense) recognized in OCI
  
Ps.
  2,760,313
 
 
Ps.
2,013,480
 
 
Ps.
  8,838,714
 
 
  
 
 
 
 
 
 
 
 
 
 
Summary of Reconciliation of Statutory Income Tax Rate in Mexico to Consolidated Effective Income Tax Rate Recognized
 
 
  
Year ended December 31,
 
 
  
    2017    
 
 
    2018    
 
 
    2019    
 
Statutory income tax rate in Mexico
  
 
30.0
% 
 
 
30.0
% 
 
 
30.0
% 
Impact of
non-deductible
and
non-taxable
items:
  
   
 
   
 
   
Tax inflation effects
  
 
17.8
% 
 
 
7.3
% 
 
 
3.5
% 
Derivatives
  
 
1.0
% 
 
 
0.4
% 
 
 
(0.1
%) 
Employee benefits
  
 
2.2
% 
 
 
1.3
% 
 
 
1.8
% 
Other
  
 
2.6
% 
 
 
6.3
% 
 
 
1.8
% 
 
  
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate on Mexican operations
  
 
53.6
% 
 
 
45.3
% 
 
 
37.0
% 
Use of unrecognized tax credits in Brazil
  
 
(0.4
%) 
 
 
—  
 
 
 
—  
 
Dividends received from associates Equity
  
 
(1.2
%) 
 
 
(0.8
%) 
 
 
(0.4
%) 
Foreign subsidiaries and other
non-deductible
items, net
  
 
(8.3
%) 
 
 
1.5
% 
 
 
5.5
% 
 
  
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
  
 
43.7
% 
 
 
46.0
% 
 
 
42.1
% 
 
  
 
 
 
 
 
 
 
 
 
 
 
Summary of Analysis of Temporary Differences Giving Rise to Net Deferred Tax Liability
An analysis of temporary differences giving rise to the net deferred tax liability is as follows:
 
 
  
Consolidated statements of financial position
 
  
Consolidated statements of comprehensive income
 
 
  
            2018            
 
  
            2019            
 
  
2017
 
  
2018
 
  
2019
 
Provisions
  
 
Ps. 20,781,421
 
  
 
Ps. 17,964,305
 
  
 
Ps. 1,579,604
 
  
 
Ps. 1,841,705
 
  
 
Ps. (257,070)
 
Deferred revenues
  
 
6,866,120
 
  
 
5,820,260
 
  
 
(965,010)
 
  
 
3,632,051
 
  
 
(1,077,259)
 
Tax losses carry forward
  
 
27,881,491
 
  
 
26,630,407
 
  
 
(323,506)
 
  
 
(5,833,660)
 
  
 
(9,873)
 
Property, plant and equipment 
(1)
  
 
(11,756,590)
 
  
 
(11,962,544)
 
  
 
1,974,753
 
  
 
453,493
 
  
 
(461,594)
 
Inventories
  
 
2,106,976
 
  
 
1,787,065
 
  
 
519,046
 
  
 
81,270
 
  
 
(291,531)
 
Licenses and rights of use 
(1)
  
 
(3,896,788)
 
  
 
(3,399,931)
 
  
 
348,201
 
  
 
961,402
 
  
 
432,403
 
Employee benefits
  
 
33,673,874
 
  
 
41,743,744
 
  
 
1,225,310
 
  
 
1,128,209
 
  
 
(1,019,042)
 
Other
  
 
10,956,823
 
  
 
9,491,550
 
  
 
793,094
 
  
 
(270,407)
 
  
 
(1,210,417)
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Net deferred tax assets
  
 
Ps. 86,613,327
 
  
 
Ps. 88,074,856
 
  
   
  
   
  
   
 
  
 
 
 
  
 
 
 
  
   
  
   
  
   
Deferred tax expense in net profit for the year
 
  
 
Ps. 5,151,492
 
  
 
Ps. 1,994,063
 
  
 
Ps. (3,894,383)
 
  
  
 
 
 
  
 
 
 
  
 
 
 
 
(1)
As of December 31, 2018 and 2019 the balance included the effects of hyperinflation.
Summary of Reconciliation of Deferred Tax Assets and Liabilities, Net
 
Reconciliation of deferred tax assets and liabilities, net:
 
 
  
2017
 
 
2018
 
 
2019
 
Opening balance as of January 1,
  
Ps.
98,589,818
 
 
Ps.
104,573,985
 
 
Ps.
86,613,327
 
Deferred tax benefit
  
 
5,151,492
 
 
 
1,994,063
 
 
 
(3,894,384
) 
Translation effect
  
 
(1,687,276
) 
 
 
(8,854,010
) 
 
 
2,047,916
 
Deferred tax benefit recognized in OCI
  
 
2,760,313
 
 
 
2,013,480
 
 
 
8,838,714
 
Deferred taxes acquired in business combinations
  
 
(240,362
) 
 
 
(25,827
) 
 
 
(276,568
) 
Hyperinflationary effect in Argentina
  
 
—  
 
 
 
(4,907,151
) 
 
 
(5,254,149
) 
Effect of adoption of IFRS 9
  
 
—  
 
 
 
544,628
 
 
 
—  
 
Effect of adoption of IFRS 15
  
 
—  
 
 
 
(8,725,841
) 
 
 
—  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Closing balance as of December 31,
  
Ps.
104,573,985
 
 
Ps.
86,613,327
 
 
Ps.
88,074,856
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Presented in the consolidated statements of financial position as follows:
  
   
 
   
 
   
Deferred income tax assets
  
Ps.
116,571,349
 
 
Ps.
111,186,768
 
 
Ps.
106,167,897
 
Deferred income tax liabilities
  
 
(11,997,364
) 
 
 
(24,573,441
) 
 
 
(18,093,041
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
  
Ps.
104,573,985
 
 
Ps.
86,613,327
 
 
Ps.
88,074,856
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Available Tax Loss Carryforwards Recorded in Deferred Tax Assets
a) At December 31, 2019, the available tax loss carryforwards recorded in deferred tax assets are as follows on a country by country basis:
 
Country
  
Balance of available tax
loss carryforwards at
December 31, 2019
 
  
Tax loss carryforward
benefit
 
Brazil
  
 
Ps. 52,118,464
 
  
 
Ps.17,720,278
 
Austria
  
 
14,470,465
 
  
 
3,617,616
 
Mexico
  
 
13,980,757
 
  
 
4,194,227
 
Colombia
  
 
2,354,479
 
  
 
776,978
 
Peru
  
 
392,999
 
  
 
115,935
 
Chile
  
 
754,221
 
  
 
203,640
 
Puerto Rico
  
 
4,598
 
  
 
1,733
 
 
  
 
 
 
  
 
 
 
Total
  
 
Ps. 84,075,983
 
  
 
Ps.26,630,407