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Note 1 - Corporate Information | 12 Months Ended
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Dec. 31, 2018
Statement Line Items [Line Items] |
Description of corporate information [text block] |
| 1. | CORPORATE INFORMATION
| (a) | Description of business
Ambev S.A. (referred to as the “Company” or “Ambev”), headquartered in São Paulo, Brazil, has purpose directly or through the participation in other companies, produces and sells beer, draft beer, soft drinks, other non-alcoholic beverages, malt and food in general, as well as the advertising of its and third party products, the sale of promotional and advertising materials and the direct or indirect exploitation of bars, restaurants, snack bars and similar, among others. The Company’s shares and ADR’s (American Depositary Receipts) are listed on the B3 S.A.- Brasil, Bolsa, Balcão as “ABEV3” and on the New York Stock Exchange (NYSE) as “ABEV”. The Company’s direct controlling shareholders are Interbrew International B.V. (“IIBV”), AmBrew S.A. (“Ambrew”), both subsidiaries of Anheuser-Busch InBev N.V. (“AB InBev”) and Fundação Antonio e Helena Zerrenner Instituição Nacional de Beneficência (“Fundação Zerrenner”). The financial statements were approved by the Board of Directors on February 27 th , 2019.
| (b) | Major corporate events in 2018, 2017 and 2016
Application of inflation accounting and financial reporting in hyperinflationary economies In June 2018, the Argentinean peso underwent a severe devaluation resulting in the three -year cumulative inflation of Argentina to exceed 100%, thereby triggering the requirement to transition to hyperinflation accounting as prescribed by IAS 29 Financial Reporting in Hyperinflationary Economies as of January 1 st ,2018 (beginning of the reporting period in which it identifies the existence of hyperinflation). Under IAS 29, the non-monetary assets and liabilities, the equity and the income statement of subsidiaries operating in hyperinflationary economies are restated for changes in the general purchasing power of the local currency applying a general price index. The financial statements of an entity whose functional currency is the currency of a hyperinflationary economy, whether they are based on a historical cost approach or a current cost approach, shall be stated in terms of the measuring unit current at the end of the reporting period and conversion into Brazilian Real at the period closing exchange rate. Consequently, the company has applied hyperinflation accounting for its Argentinean subsidiaries in these consolidated interim financial statements applying the IAS 29 rules as follows: • hyperinflation accounting was applied as of January 1 st , 2018 (under paragraph 4 of IAS 29, the standard applies to the financial statements of any entity from the beginning of the reporting period in which it identifies the existence of hyperinflation); • non-monetary assets and liabilities stated at historical cost (e.g. property plant and equipment, intangible assets, goodwill, etc.) and equity of subsidiaries in Argentina were restated using an inflation index. The hyperinflation impacts resulting from changes in the general purchasing power until 31 December 2017 were reported in retained earnings and the impacts of changes in the general purchasing power from January 1 st , 2018 are reported through the income statement on a dedicated account for hyperinflation monetary adjustments in the finance line (see also Note 11 - Finance cost and income ). Under paragraph 3 of IAS 29, there is no a general price index, but allow to be executed judgement when restatement of financial statements becomes necessary. That way, the index used was based in Resolution 539/18 issued by Argentine Federation of Professional Boards on Economic Sciences: i) from January 1 st , 2017 onwards the national IPC (national consumer price index); ii) to December 31,2016 the IPIM (wholesale price index) . • the income statement is adjusted at the end of each reporting period using the change in the general price index and is converted at the closing exchange rate of each period (rather than the year to date average rate for non hyperinflationary economies), thereby restating the year to date income statement account both for inflation index and currency conversion; • the prior year income statement and the first and second quarter of 2018 and balance sheet of the Argentinean subsidiaries were not restated. Under paragraph 42 (b) of IAS 21 when amounts are translated into the currency of a non-hyperinflationary economy, comparative amounts shall be those that were presented as current year amounts in the relevant prior year financial statements (i.e. not adjusted for subsequent changes in the price level or subsequent changes in exchange rates). The net assets impacts of the Company on December 31, 2018 are presents as below:
Assets |  |  | 12/31/2018 |
Property, plant and equipment |  |  | 1,394.9 |
Goodwill |  |  | 1,686.4 |
Intangible |  |  | 976.3 |
Non-current assets |  |  | 4,057.6 |
Inventories |  |  | 72.8 |
Current assets |  |  | 72.8 |
Total assets |  |  | 4,130.4 |
Equity and liabilities |  |  |  |
Equity |  |  |  |
Reserves |  |  | (8.2 | )
Carrying value adjustments |  |  | 258.2 |
Retained earnings |  |  | 3,252.4 |
Equity attributable to equity holders of Ambev |  |  | 3,502.4 |
Non-controlling interests |  |  | (2.4 | )
Total Equity |  |  | 3,500.0 |
Deferred tax liabilities |  |  | 630.4 |
Non-current liabilities |  |  | 630.4 |
Total liabilities |  |  | 630.4 |
Total equity and liabilities |  |  | 4,130.4 |
The income statement of year ended 2017 of operations in Argentina were translated at an average rate of 0.193096 Argentinean pesos per Brazilian Real. The income statement of year ended December 31, 2018 of operations in Argentina was corrected by inflation index and, later translated at the December 31, 2018 closing rate of 0.102486 Argentinean pesos per Brazilian Real, in consequence of IAS 29 application. In year ended December 31, 2018, the adoption to Hyperinflation Accounting in accordance with the IFRS rules, resulted in (i) a positive R$182.5 adjustment reported in the finance results, (ii) a negative impact on the Profit of R$292.4. Exchange contracts for future financial flows - Equity Swap On December 21, 2017 Ambev's Board of Directors approved the execution, by the Company or its subsidiaries, of equity swap contracts through financial institutions to be defined by the Company's management, having as underlying asset the shares issued by the Company or American Depositary Receipts (ADR’s), without losses on the liquidation, within the regulatory term, of the contracts still in force. The settlement of the approved equity swap contracts shall occur within a maximum period of 18 months from approval, such contracts may result in exposure up to 44 million common shares (of which all or part may be through ADR's), with a limit value up to R$820 million. On May 15, 2018 Ambev’s Board of Directors approved the conclusion of new equity swap contracts, without losses on the liquidation, within the regulatory term, of the contracts still in force. The settlement of the new approved equity swap shall occur within a maximum period of 18 months from approval, and such contracts may result in exposure up to 80 million common shares ( which all or part may be through ADR's), with a limit value up to R$1.8 million. On December 20, 2018, the Board of Directors of Ambev approved the conclusion of new equity swap contracts, without prejudice to the liquidation, within the regulatory term, of the equity swap contracts still in force. The settlement of the new approved equity swap contracts shall occur within a maximum period of 18 months from approval, and such contracts may result in exposure up to 80 million common shares (of which all or part may be through ADRs), with a limit value up to R$1.5 billion, in addition to contracts already executed in the context of the approvals of December 21, 2017 and May 15, 2018, and which have not yet been settled, may result in an exposure up to 137,394,353 common shares (all or part of which may be through ADR's). Addendum to the Agreement with PepsiCo The long-term agreement with PepsiCo, under which the Company has the exclusive right to bottle, sell and distribute certain brands on PepsiCo’s portfolio of soft drinks in Brazil, including Pepsi Cola, Gatorade, H2OH! and Lipton Ice Tea, was added in October 2018 to reflect certain changes in the trade agreement between the parties. The new terms of the agreement were approved by CADE in December 2018 and became effective as of January 1 st , 2019. The agreement will be in force until December 31, 2027. Sale of subsidiary On June 8, 2018 the Company concluded the sale of all shares of the subsidiary, Barbados Bottling Co. Limited, active in the Soft drink segment, by the amount of US$53 million, corresponding to R$179 million. An result of this transaction the Company recorded a gain of US$22 million, corresponding to R$75 million at the transaction date and to R$79 million in December 31, 2018, in the income statement as Exceptional item. Perpetual licensing agreement with Quilmes In September 2017, Quilmes, a subsidiary of Ambev, entered into an agreement whereby AB InBev will grant a perpetual license to Quilmes in Argentina for Budweiser and other North American brands upon the recovery of the distribution rights by AB InBev from the Chilean company Compañia Cervecerías Unidas S.A. - CCU. The agreement also foreseed the transfer of the brewery of Cerveceria Argentina Sociedad Anonima Isenbeck by AB InBev to Quilmes and the transfer of some Argentinean brands (Norte, Iguana and Baltica) and related business assets along with US$50 million by Quilmes to CCU. The transaction was closed on May 2, 2018, following the approval, on April 27, 2018, by the Argentinean antitrust authority (Comisión Nacional de Defensa de la Competencia) of the main transaction documents and verification of other usual conditions closing. The Company recorded a gain of 306 million of Argentinean pesos, corresponding to R$50 million on the transaction date and to R$30 million in December 31, 2018 in the income statement as a result of the application of the accounting practice for the exchange of assets involving transactions under common control as Exceptional item. Renegotiation of shareholders agreement from Tenedora On December 1 st , 2017, Ambev informed its shareholders and the general market that the E. León Jimenes, S.A. (“ELJ”), partner of Ambev in Tenedora, S.A. (“Tenedora”), which holds almost all shares of Cervecería Nacional Dominicana, S.A (“CND”), would exercise partially, as provide for in shareholders’ agreement of Tenedora, ELJ put option with relation to approximately 30% of capital stock by Tenedora. Due the partial put exercise option, the Company will pay to ELJ the amount of R$3 billion (equivalent to USD 926.5 million) and would be the holder of approximately 85% of Tenedora, and ELJ will remain with 15% interest of CND. Considering the strategic importance of alliance with the ELJ, the Board of Directors of Ambev approved this date the change of the call option term from 2019 to 2022, of the period for the call option granted by ELJ to the Company to become exercisable. The transaction was subject to certain conditions precedent that was concluded on January 18, 2018. Adherence to the Special Tax Regularization Program - PERT 2017 During the third quarter of 2017, the Company adhere a Special Program for Tax Regularization, fixed by Provisional Measure no. 783, from May 31, 2017, extended by the Provisional Measure no. 798 (“PERT 2017 in August, 30 2017”), undertaking to pay some tax assessments that were in dispute, including debts from its subsidiaries, for a total amount of R$3.5 billion, already considering discounts according to the program, having paid the amount of approximately R$960 million in 2017 and undertaking to pay the remaining value in 145 monthly installments, with interest, starting in January, 2018, the installments owed until moment, have been paid. Acquisition of the Cachoeiras de Macacu In December 2016, the Company acquired Cachoeira de Macacu Bebidas Ltda. from Brasil Kirin Indústria de Bebidas Ltda., a company that owns an operating industrial plant for the production and packaging of beer and non-alcohol beverages in the State of Rio de Janeiro for R$478.6 million. Exchange of shareholdings On May 12, 2016, Ambev and its controlling shareholder, AB InBev, entered into an agreement for the exchange of shareholdings (“Swap”). The execution of the Swap was conditional on the implementation of the merger of the activities of AB InBev and SABMiller Plc (“SABMiller”), which occurred on October 10, 2016. Subsequently, on December 31, 2016, after the implementation of certain preparatory corporate acts, the Swap was effected. Based on the agreement described above, Ambev transferred to AB InBev the equity interest in Keystone Global Corporation - KGC, which held shares in companies domiciled in Colombia, Peru and Ecuador. On the other hand, AB InBev transferred to Ambev its interest in Cerveceria Nacional S. de R.L., a subsidiary domiciled in Panama, which had previously been acquired as a third party. The value attributed to the transaction is based on a fairness opinion prepared by a specialized company and duly approved by the Board of Directors of Ambev, with abstention from the vote of the directors appointed by AB InBev. The result of the transaction above mentioned was R$1,236.8 million, of which R$1,240.0 million was recognized in the income statement on exceptional items. Acquisition of Archibald Microbrasserie On April, 2016, the Company, through its wholly-owned subsidiary Labatt Breweries, in Canada, acquired the company Archibald Microbrasserie, known for its local beers and seasonal specialties. Furthermore, in Brazil, acquired 66% of the company Sucos do Bem, which has a range of juices, teas and cereal bars. The acquisition amount added was approximately R$155 million. Acquisition of Mark Anthony Group Companies On January, 2016, the Ambev, through its wholly-owned subsidiaries, CRBS S.A. and Ambev Luxembourg, acquired companies to a range of primarily spirit-based beers and ciders from Mark Anthony Group, by R$1.4 billion.

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