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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2018
Text block [abstract] |
Summary of Major Components of Income Tax Expense | The major components of income tax expense for the years ended December 31, 2018, 2017 and 2016 are:
|  | 2018 |  |  | 2017 |  |  | 2016 |
Current tax expense |  | Ps. | 10,480 |  |  | Ps. | 18,592 |  |  | Ps. | 13,548 |
Deferred tax expense: |  |  |  |  |  |  |  |  |  |  |  |
Origination and reversal of temporary differences |  |  | 491 |  |  |  | (7,546 | ) |  |  | (3,947 | )
(Recognition) of tax losses, net |  |  | (927 | ) |  |  | (823 | ) |  |  | (1,693 | )
Change in the statutory rate |  |  | 125 |  |  |  | (10 | ) |  |  | (20 | )
Total deferred tax income |  |  | (311 | ) |  |  | (8,379 | ) |  |  | (5,660 | )
|  | Ps. | 10,169 |  |  | Ps. | 10,213 |  |  | Ps. | 7,888 |
Schedule of Recognized in Consolidated Statement of Other Comprehensive Income | Recognized in Consolidated Statement of Other Comprehensive Income (“OCI”)
Income tax related to items charged or recognized directly in OCI during the period: |  | 2018 |  |  | 2017 |  |  | 2016 |
Unrealized loss on cash flow hedges |  | Ps. | (293 | ) |  | Ps. | (191 | ) |  | Ps. | 745 |
Exchange differences on translation of foreign operations |  |  | (2,647 | ) |  |  | 387 |  |  |  | 4,478 |
Remeasurements of the net defined benefit liability |  |  | 287 |  |  |  | (154 | ) |  |  | (49 | )
Share of the other comprehensive income of equity accounted investees |  |  | 989 |  |  |  | (1,465 | ) |  |  | (1,385 | )
Total income tax cost recognized in OCI |  | Ps. | (1,664 | ) |  | Ps. | (1,423 | ) |  | Ps. | 3,789 |
Schedule of Domestic Tax Rate | A reconciliation between tax expense and income before income taxes and share of the profit or loss of associates and joint ventures accounted for using the equity method multiplied by the Mexican domestic tax rate for the years ended December 31, 2018, 2017 and 2016 is as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
Mexican statutory income tax rate |  |  | 30.0 | % |  |  | 30.0 | % |  |  | 30.0 | %
Difference between book and tax inflationary values and translation effects |  |  | (4.0 | %) |  |  | (5.7 | %) |  |  | (2.4 | %)
Annual inflation tax adjustment |  |  | (1.2 | %) |  |  | 0.5 | % |  |  | 0.6 | %
Difference between statutory income tax rates |  |  | 1.8 | % |  |  | 1.2 | % |  |  | 1.2 | %
Repatriation of capital benefit decree |  |  | — |  |  |  | (22.6 | %) |  |  | — |
Non-deductible expenses |  |  | 3.2 | % |  |  | 2.6 | % |  |  | 2.8 | %
Non-taxable income |  |  | (0.5 | %) |  |  | — |  |  |  | (0.4 | %)
Effect of changes in Argentina tax law |  |  | (0.9 | %) |  |  | — |  |  |  | — |
Income tax credits |  |  | — |  |  |  | (2.0 | %) |  |  | (3.9 | %)
Venezuela deconsolidation effect |  |  | — |  |  |  | 28.6 | % |  |  | — |
Others |  |  | 1.8 | % |  |  | (4.1 | %) |  |  | (0.3 | %)
|  |  | 30.2 | % |  |  | 28.6 | % |  |  | 27.6 | %
Schedule of Deferred Income Tax | Deferred Income Tax Related to:
|  | Consolidated Statement of Financial Position as of |  |  | Consolidated Statement of Income |
|  | December 31, 2018 |  |  | December 31, 2017 |  |  | 2018 |  |  | 2017 |  |  | 2016 |
Allowance for doubtful accounts |  | Ps. | (416 | ) |  | Ps. | (152 | ) |  | Ps. | 93 |  |  | Ps. | 16 |  |  | Ps. | (17 | )
Inventories |  |  | 80 |  |  |  | (151 | ) |  |  | (27 | ) |  |  | (71 | ) |  |  | (151 | )
Other current assets |  |  | 75 |  |  |  | 101 |  |  |  | (31 | ) |  |  | 34 |  |  |  | (80 | )
Property, plant and equipment, net (3) |  |  | (3,841 | ) |  |  | (2,733 | ) |  |  | (851 | ) |  |  | (2,349 | ) |  |  | 670 |
Investments in equity accounted investees |  |  | (5,979 | ) |  |  | (6,989 | ) |  |  | 40 |  |  |  | (5,094 | ) |  |  | 75 |
Other assets |  |  | 212 |  |  |  | 254 |  |  |  | (82 | ) |  |  | (155 | ) |  |  | 234 |
Finite useful lived intangible assets |  |  | 271 |  |  |  | 894 |  |  |  | 627 |  |  |  | 207 |  |  |  | (1,506 | )
Indefinite lived intangible assets |  |  | 10,331 |  |  |  | 9,957 |  |  |  | 758 |  |  |  | 968 |  |  |  | 7,391 |
Post-employment and other long-term employee benefits |  |  | (1,058 | ) |  |  | (965 | ) |  |  | (148 | ) |  |  | (77 | ) |  |  | (34 | )
Derivative financial instruments |  |  | 21 |  |  |  | 84 |  |  |  | (63 | ) |  |  | (171 | ) |  |  | 128 |
Provisions |  |  | (2,761 | ) |  |  | (3,500 | ) |  |  | 1,122 |  |  |  | (636 | ) |  |  | (411 | )
Temporary non-deductible provision |  |  | (1,400 | ) |  |  | (222 | ) |  |  | (293 | ) |  |  | (144 | ) |  |  | (9,118 | )
Employee profit sharing payable |  |  | (403 | ) |  |  | (351 | ) |  |  | (27 | ) |  |  | (11 | ) |  |  | (29 | )
Tax loss carryforwards |  |  | (9,558 | ) |  |  | (10,218 | ) |  |  | (927 | ) |  |  | (547 | ) |  |  | (1,693 | )
Tax credits to recover (2) |  |  | (1,855 | ) |  |  | (2,308 | ) |  |  | (109 | ) |  |  | (1,059 | ) |  |  | (1,150 | )
Other comprehensive income (1) |  |  | 229 |  |  |  | 239 |  |  |  | (54 | ) |  |  | (224 | ) |  |  | — |
Exchange differences on translation of foreign operations in OCI |  |  | 5,202 |  |  |  | 7,168 |  |  |  | — |  |  |  | — |  |  |  | — |
Other liabilities |  |  | 193 |  |  |  | (828 | ) |  |  | (324 | ) |  |  | 948 |  |  |  | 102 |
Deferred tax income |  |  |  |  |  |  |  |  |  | Ps. | (296 | ) |  | Ps. | (8,355 | ) |  | Ps. | (5,589 | )
Deferred tax income net recorded in share of the profit of equity accounted investees |  |  |  |  |  |  |  |  |  |  | (15 | ) |  |  | (24 | ) |  |  | (71 | )
Deferred tax income, net |  |  |  |  |  |  |  |  |  | Ps. | (311 | ) |  | Ps. | (8,379 | ) |  | Ps. | (5,660 | )
Deferred income taxes, net |  |  | (10,657 | ) |  |  | (9,720 | ) |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax asset |  |  | (16,543 | ) |  |  | (15,853 | ) |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax liability |  |  | Ps. 5,886 |  |  | Ps. | 6,133 |  |  |  |  |  |  |  |  |  |  |  |  |
(1) | Deferred tax related to derivative financial instruments and remeasurements of the net defined benefit liability.
(2) | Correspond to income tax credits arising from dividends received from foreign subsidiaries to be recovered within the next ten years accordingly to the Mexican Income Tax law as well as effects of the exchange of foreign currencies with a related and non-related parties.
(3) | As a result of the change in the application of the law, the Company recognized a deferred tax liability in Venezuela for an amount of Ps. 1,107 with their corresponding impact on the income tax of the year as disclosed in the effective tax rate reconciliation. The liability was recognized in 2017 upon deconsolidation of Coca-Cola FEMSA’s Venezuelan operations.
Schedule of Deferred Tax related to Other Comprehensive Income (AOCI) | Deferred tax related to Other Comprehensive Income (“AOCI”)
Income tax related to items charged or recognized directly in AOCI as of the year: |  | 2018 |  |  | 2017 |
Unrealized loss on derivative financial instruments |  | Ps. | 361 |  |  | Ps. | 641 |
Remeasurements of the net defined benefit liability |  |  | (132 | ) |  |  | (402 | )
Total deferred tax loss related to AOCI |  | Ps. | 229 |  |  | Ps. | 239 |
Schedule of Changes in Net Deferred Income Tax Asset | The changes in the balance of the net deferred income tax asset are as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
Balance at the beginning of the period |  | Ps. | (9,720 | ) |  | Ps. | (1,016 | ) |  | Ps. | (2,063 | )
Deferred tax provision for the period |  |  | (311 | ) |  |  | (8,218 | ) |  |  | (5,660 | )
Deferred tax income net recorded in share of the profit of equity accounted investees |  |  | 165 |  |  |  | (67 | ) |  |  | 71 |
Acquisition of subsidiaries (see Note 4) |  |  | (316 | ) |  |  | (367 | ) |  |  | 1,375 |
Effects in equity: |  |  |  |  |  |  |  |  |  |  |  |
Unrealized loss on cash flow hedges |  |  | (445 | ) |  |  | (83 | ) |  |  | 1,008 |
Exchange differences on translation of foreign operations |  |  | (1,762 | ) |  |  | (1,472 | ) |  |  | 3,260 |
Remeasurements of the net defined benefit liability |  |  | 543 |  |  |  | 131 |  |  |  | (479 | )
Retained earnings of equity accounted investees |  |  | 54 |  |  |  | (38 | ) |  |  | (224 | )
Cash flow hedges in foreign investments |  |  | 310 |  |  |  | (540 | ) |  |  | (618 | )
Restatement effect of the period and beginning balances associated with hyperinflationary economies |  |  | 438 |  |  |  | 1,689 |  |  |  | 2,314 |
Disposal of subsidiaries |  |  | 387 |  |  |  | — |  |  |  | — |
Deconsolidation of subsidiaries |  |  | — |  |  |  | 261 |  |  |  | — |
Balance at the end of the period |  | Ps. | (10,657) |  |  |  | Ps. (9,720) |  |  | Ps. | (1,016) |
Schedule of Tax Loss Carryforwards | The subsidiaries in Mexico, Colombia and Brazil have tax loss carryforwards. The tax losses carryforwards and corresponding years of expiration are as follows:
Year |  | Tax Loss Carryforwards |
2019 |  | Ps. | 716 |
2020 |  |  | 301 |
2021 |  |  | 338 |
2022 |  |  | 370 |
2023 |  |  | 288 |
2024 |  |  | 744 |
2025 |  |  | 4,029 |
2026 |  |  | 4,483 |
2027 |  |  | 728 |
2028 and thereafter |  |  | 3,023 |
No expiration (Brazil and Colombia) |  |  | 14,921 |
|  | Ps. | 29,941 |
Summary of Changes in the Balance of Tax Loss Carryforwards | The changes in the balance of tax loss carryforwards are as follows:
|  | 2018 |  |  | 2017 |
Balance at beginning of the period |  | Ps. | 29,487 |  |  | Ps. | 27,452 |
Reserved |  |  | (306 | ) |  |  | — |
Additions |  |  | 4,124 |  |  |  | 5,673 |
Usage of tax losses |  |  | (1,385 | ) |  |  | (3,157 | )
Translation effect of beginning balances |  |  | (1,979 | ) |  |  | (481 | )
Balance at end of the period |  | Ps. | 29,941 |  |  | Ps. | 29,487 |

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