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Intangible Assets | 12 Months Ended
--- | ---
Dec. 31, 2023
Intangible assets other than goodwill [abstract] |
Intangible Assets | Intangible Assets
|  | Rights to Produce and Distribute Coca-Cola Trademark Products |  | Goodwill |  | Trademark Rights |  | Other Indefinite Lived Intangible Assets |  | Total Unamortized Intangible Assets |  | Technology Costs and Management Systems |  | Customer Relationships (1) |  | Alcohol Licenses |  | Other |  | Total Amortized Intangible Assets |  | Total Intangible Assets
Cost as of January 1, 2021 |  | Ps. | 76,649 |  |  | Ps. | 52,820 |  |  | Ps. | 8,647 |  |  | Ps. | 1,376 |  |  | Ps. | 139,492 |  |  | Ps. | 10,873 |  |  | Ps. | 9,850 |  |  | Ps. | 1,897 |  |  | Ps. | 2,350 |  |  | Ps. | 24,970 |  |  | Ps. | 164,462 |
Additions |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 127 |  |  |  | 129 |  |  |  | 1,140 |  |  |  | — |  |  |  | 145 |  |  |  | 1,103 |  |  |  | 2,388 |  |  |  | 2,517 |
Acquisitions from business combinations (see Note 4) |  |  | — |  |  |  | 7,940 |  |  |  | 65 |  |  |  | — |  |  |  | 8,005 |  |  |  | — |  |  |  | 873 |  |  |  | — |  |  |  | 1 |  |  |  | 874 |  |  |  | 8,879 |
Transfer of completed development systems |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 262 |  |  |  | — |  |  |  | — |  |  |  | (262) |  |  |  | — |  |  |  | — |
Disposals |  |  | — |  |  |  | (12) |  |  |  | — |  |  |  | (10) |  |  |  | (22) |  |  |  | (973) |  |  |  | — |  |  |  | (36) |  |  |  | (102) |  |  |  | (1,111) |  |  |  | (1,133) |
Effect of movements in exchange rates |  |  | (1,255) |  |  |  | (2,303) |  |  |  | (584) |  |  |  | (80) |  |  |  | (4,222) |  |  |  | (641) |  |  |  | 77 |  |  |  | — |  |  |  | (682) |  |  |  | (1,246) |  |  |  | (5,468) |
Changes in value on the recognition of inflation effects |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 62 |  |  |  | 62 |  |  |  | 62 |
Impairment |  |  | — |  |  |  | (1,094) |  |  |  | (55) |  |  |  | — |  |  |  | (1,149) |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,149) |
Cost as of December 31, 2021 |  | Ps. | 75,396 |  |  | Ps. | 57,351 |  |  | Ps. | 8,073 |  |  | Ps. | 1,413 |  |  | Ps. | 142,233 |  |  | Ps. | 10,661 |  |  | Ps. | 10,800 |  |  | Ps. | 2,006 |  |  | Ps. | 2,470 |  |  | Ps. | 25,937 |  |  | Ps. | 168,170 |
(1)Includes customer relationships related to the acquisitions through Envoy Solutions disclosed in Note 4.
|  | Rights to Produce and Distribute Coca-Cola Trademark Products |  | Goodwill |  | Trademark Rights |  | Other Indefinite Lived Intangible Assets |  | Total Unamortized Intangible Assets |  | Technology Costs and Management Systems |  | Customer Relationships (1) |  | Alcohol Licenses |  | Other |  | Total Amortized Intangible Assets |  | Total Intangible Assets
Cost as of January 1, 2022 |  | Ps. | 75,396 |  | Ps. | 57,351 |  | Ps. | 8,073 |  | Ps. | 1,413 |  | Ps. | 142,233 |  | Ps. | 10,661 |  | Ps. | 10,800 |  | Ps. | 2,006 |  | Ps. | 2,470 |  | Ps. | 25,937 |  | Ps. | 168,170
Additions |  |  | — |  |  | 22 |  |  | — |  |  | 12 |  |  | 34 |  |  | 672 |  |  | — |  |  | 50 |  |  | 1,476 |  |  | 2,198 |  |  | 2,232
Acquisitions from business combinations (see Note 4) |  |  | 1,116 |  |  | 33,715 |  |  | 1,077 |  |  | — |  |  | 35,908 |  |  | 373 |  |  | — |  |  | — |  |  | 1,054 |  |  | 1,427 |  |  | 37,335
Changes in fair value of past acquisitions |  |  | — |  |  | (2,557) |  |  | — |  |  | — |  |  | (2,557) |  |  | — |  |  | 2,955 |  |  | — |  |  | — |  |  | 2,955 |  |  | 398
Internal developments |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 10 |  |  | — |  |  | — |  |  | — |  |  | 10 |  |  | 10
Transfer of completed development systems |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 65 |  |  | — |  |  | (50) |  |  | (15) |  |  | — |  |  | —
Disposals |  |  | — |  |  | — |  |  | — |  |  | (2) |  |  | (2) |  |  | (891) |  |  | (3) |  |  | (29) |  |  | — |  |  | (923) |  |  | (925)
Effect of movements in exchange rates |  |  | (756) |  |  | (2,057) |  |  | (106) |  |  | (158) |  |  | (3,077) |  |  | 15 |  |  | (264) |  |  | — |  |  | 466 |  |  | 217 |  |  | (2,860)
Changes in value on the recognition of inflation effects |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 80 |  |  | 80 |  |  | 80
Impairment |  |  | — |  |  | (770) |  |  | — |  |  | — |  |  | (770) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (770)
Cost as of December 31, 2022 |  | Ps. | 75,756 |  | Ps. | 85,704 |  | Ps. | 9,044 |  | Ps. | 1,265 |  | Ps. | 171,769 |  | Ps. | 10,905 |  | Ps. | 13,488 |  | Ps. | 1,977 |  | Ps. | 5,531 |  | Ps. | 31,901 |  | Ps. | 203,670
(1)Includes customer relationships related to the acquisitions through Envoy Solutions disclosed in Note 4.
|  | Rights to Produce and Distribute Coca-Cola Trademark Products |  | Goodwill |  | Trademark Rights |  | Other Indefinite Lived Intangible Assets |  | Total Unamortized Intangible Assets |  | Technology Costs and Management Systems |  | Customer Relationships |  | Alcohol Licenses |  | Other |  | Total Amortized Intangible Assets |  | Total Intangible Assets
Cost as of January 1, 2023 |  | Ps. | 75,756 |  | Ps. | 85,704 |  | Ps. | 9,044 |  | Ps. | 1,265 |  | Ps. | 171,769 |  | Ps. | 10,905 |  | Ps. | 13,488 |  | Ps. | 1,977 |  | Ps. | 5,531 |  | Ps. | 31,901 |  | Ps. | 203,670
Additions |  |  | — |  |  | — |  |  | — |  |  | 4 |  |  | 4 |  |  | 1,966 |  |  | — |  |  | 261 |  |  | 1,174 |  |  | 3,401 |  |  | 3,405
Acquisitions from business combinations (see Note 4) |  |  | — |  |  | 3,918 |  |  | 26 |  |  | — |  |  | 3,944 |  |  | 145 |  |  | 188 |  |  | — |  |  | 25 |  |  | 358 |  |  | 4,302
Changes in fair value of past acquisitions |  |  | — |  |  | (12,273) |  |  | 7,683 |  |  | — |  |  | (4,590) |  |  | — |  |  | 5,162 |  |  | — |  |  | (117) |  |  | 5,045 |  |  | 455
Business disposals |  |  | (12) |  |  | (25,036) |  |  | (3,009) |  |  | (56) |  |  | (28,113) |  |  | (482) |  |  | (17,788) |  |  | — |  |  | (29) |  |  | (18,299) |  |  | (46,412)
Transfer of completed development systems |  |  | (224) |  |  | — |  |  | — |  |  | 227 |  |  | 3 |  |  | 292 |  |  | — |  |  | — |  |  | (295) |  |  | (3) |  |  | —
Disposals |  |  | — |  |  | (2) |  |  | — |  |  | (2) |  |  | (4) |  |  | (197) |  |  | — |  |  | (161) |  |  | (235) |  |  | (593) |  |  | (597)
Effect of movements in exchange rates |  |  | (1,568) |  |  | (3,744) |  |  | (810) |  |  | 45 |  |  | (6,077) |  |  | (424) |  |  | (814) |  |  | — |  |  | (683) |  |  | (1,921) |  |  | (7,998)
Changes in value on the recognition of inflation effects |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 70 |  |  | 70 |  |  | 70
Impairment |  |  | — |  |  | (4,995) |  |  | — |  |  | — |  |  | (4,995) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (4,995)
Business combinations from disposals |  |  | — |  |  |  | 1,950 |  |  |  | — |  |  |  | — |  |  |  | 1,950 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,950 |
Cost as of December 31, 2023 |  | Ps. | 73,952 |  | Ps. | 45,522 |  | Ps. | 12,934 |  | Ps. | 1,483 |  | Ps. | 133,891 |  | Ps. | 12,205 |  | Ps. | 236 |  | Ps. | 2,077 |  | Ps. | 5,441 |  | Ps. | 19,959 |  | Ps. | 153,850
Amortization and Impairment Losses |  | Rights to Produce and Distribute Coca-Cola Trademark Products |  | Goodwill |  | Trademark Rights |  | Other Indefinite Lived Intangible Assets |  | Total Unamortized Intangible Assets |  | Technology Costs and Management Systems |  | Customer Relationships |  | Alcohol Licenses |  | Other |  | Total Amortized Intangible Assets |  | Total Intangible Assets
Amortization as of January 1 2021 |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | (6,469) |  | Ps. | (827) |  | Ps. | (736) |  | Ps. | (929) |  | Ps. | (8,961) |  | Ps. | (8,961)
Amortization expense |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,473) |  |  | (791) |  |  | (102) |  |  | (328) |  |  | (2,694) |  |  | (2,694)
Disposals |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 789 |  |  | — |  |  | — |  |  | 101 |  |  | 890 |  |  | 890
Effect of movements in exchange rates |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 792 |  |  | 10 |  |  | — |  |  | (15) |  |  | 787 |  |  | 787
Changes in value on the recognition of inflation effects |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (53) |  |  | — |  |  | — |  |  | (1) |  |  | (54) |  |  | (54)
Amortization as of December 31 2021 |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | (6,414) |  | Ps. | (1,608) |  | Ps. | (838) |  | Ps. | (1,172) |  | Ps. | (10,032) |  | Ps. | (10,032)
Amortization as of January 1 2022 |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | (6,414) |  | Ps. | (1,608) |  | Ps. | (838) |  | Ps. | (1,172) |  | Ps. | (10,032) |  | Ps. | (10,032)
Amortization expense |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,312) |  |  | (915) |  |  | (104) |  |  | (365) |  |  | (2,696) |  |  | (2,696)
Disposals |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 992 |  |  | 157 |  |  | 3 |  |  | — |  |  | 1,152 |  |  | 1,152
Effect of movements in exchange rates |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (193) |  |  | (786) |  |  | — |  |  | (248) |  |  | (1,227) |  |  | (1,227)
Changes in value on the recognition of inflation effects |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (94) |  |  | — |  |  | — |  |  | (1) |  |  | (95) |  |  | (95)
Amortization as of December 31 2022 |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | (7,021) |  | Ps. | (3,152) |  | Ps. | (939) |  | Ps. | (1,786) |  | Ps. | (12,898) |  | Ps. | (12,898)
Amortization as of January 1 2023 |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | — |  | Ps. | (7,021) |  | Ps. | (3,152) |  | Ps. | (939) |  | Ps. | (1,786) |  | Ps. | (12,898) |  | Ps. | (12,898)
Amortization expense |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,519) |  |  | (1,113) |  |  | (116) |  |  | (547) |  |  | (3,295) |  |  | (3,295)
Disposals |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 161 |  |  | — |  |  | — |  |  | 209 |  |  | 370 |  |  | 370
Business disposals |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 276 |  |  | 4,010 |  |  | — |  |  | 51 |  |  | 4,337 |  |  | 4,337
Impairment |  |  | — |  |  | — |  |  | (36) |  |  | — |  |  | (36) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (36)
Effect of movements in exchange rates |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 578 |  |  | 188 |  |  | 15 |  |  | 187 |  |  | 968 |  |  | 968
Changes in value on the recognition of inflation effects |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (78) |  |  | — |  |  | — |  |  | — |  |  | (78) |  |  | (78)
Amortization as of December 31 2023 |  | Ps. | — |  | Ps. | — |  | Ps. | (36) |  | Ps. | — |  | Ps. | (36) |  | Ps. | (7,603) |  | Ps. | (67) |  | Ps. | (1,040) |  | Ps. | (1,886) |  | Ps. | (10,596) |  | Ps. | (10,632)
Carrying Amount |  | Rights to Produce and Distribute Coca-Cola Trademark Products |  | Goodwill |  | Trademark Rights |  | Other Indefinite Lived Intangible Assets |  | Total Unamortized Intangible Assets |  | Technology Costs and Management Systems |  | Customer Relationships |  | Alcohol Licenses |  | Other |  | Total Amortized Intangible Assets |  | Total Intangible Assets
As of December 31 2021 |  | Ps. | 75,396 |  | Ps. | 57,351 |  | Ps. | 8,073 |  | Ps. | 1,413 |  | Ps. | 142,233 |  | Ps. | 4,247 |  | Ps. | 9,192 |  | Ps. | 1,168 |  | Ps. | 1,298 |  | Ps. | 15,905 |  | Ps. | 158,138
As of December 31 2022 |  | Ps. | 75,756 |  | Ps. | 85,704 |  | Ps. | 9,044 |  | Ps. | 1,265 |  | Ps. | 171,769 |  | Ps. | 3,884 |  | Ps. | 10,336 |  | Ps. | 1,038 |  | Ps. | 3,745 |  | Ps. | 19,003 |  | Ps. | 190,772
As of December 31 2023 |  | Ps. | 73,952 |  | Ps. | 45,522 |  | Ps. | 12,898 |  | Ps. | 1,483 |  | Ps. | 133,855 |  | Ps. | 4,602 |  | Ps. | 169 |  | Ps. | 1,037 |  | Ps. | 3,555 |  | Ps. | 9,363 |  | Ps. | 143,218
For the years ended December 31, 2023, 2022 and 2021, allocation for amortization expense is as follows:
|  | 2023 |  | 2022 |  | 2021
Cost of goods sold |  | Ps. | 1,229 |  |  | Ps. | 207 |  |  | Ps. | 254 |
Administrative expenses |  |  | 1,257 |  |  |  | 1,771 |  |  |  | 1,630 |
Selling expenses |  |  | 809 |  |  |  | 718 |  |  |  | 810 |
|  | Ps. | 3,295 |  |  | Ps. | 2,696 |  |  | Ps. | 2,694 |
The average remaining period for the Company’s intangible assets that are subject to amortization is as follows:
|  | Years
Technology Costs and Management Systems |  | 3 - 10
Customer Relationships |  | 6 - 25
Alcohol Licenses |  | 12
Coca-Cola FEMSA Impairment Tests for cash-generating Units Containing Goodwill, Distribution Rights and Other indefinite lived intangible assets For the purpose of impairment testing, goodwill and distribution rights are allocated and monitored on an individual country basis, which is considered to be the CGU. The aggregate carrying amounts of goodwill, distribution rights and other indefinite lived intangible assets allocated to each CGU are as follows:
|  | December 31, 2023 |  | December 31, 2022
Mexico |  | Ps. | 56,662 |  | Ps. | 56,967
Guatemala |  |  | 1,684 |  |  | 1,691
Nicaragua |  |  | 404 |  |  | 404
Costa Rica |  |  | 1,418 |  |  | 1,418
Panama |  |  | 1,169 |  |  | 1,170
Colombia |  |  | 3,635 |  |  | 3,583
Brazil |  |  | 30,018 |  |  | 31,883
Argentina |  |  | 245 |  |  | 426
Uruguay |  |  | 2,381 |  |  | 2,512
Total |  | Ps. | 97,616 |  | Ps. | 100,054
The foregoing forecasts reflect the outcomes that Coca-Cola FEMSA considers most likely to occur based on the current situation of each of the CGUs including the macroeconomic situation in each CGU, the foregoing forecasts could differ from the results obtained over time. The value in use of CGUs is determined based on the method of discounted cash flows. The key assumptions used to calculate value in use are: volume, expected annual long-term inflation, and the WACC used to discount the projected flows. To determine the discount rate, Coca-Cola FEMSA uses the WACC as determined for each of the cash generating units in real terms and as described in following paragraphs. The estimated discount rates to perform the impairment test for each CGU considers market participants’ assumptions. Market participants were selected considering the size, operations and characteristics of the businesses that are similar to those of Coca-Cola FEMSA. The discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated into the projected cash flows. The discount rate calculation is based on the opportunity cost to a market participant, considering the specific circumstances of Coca-Cola FEMSA and its operating segments and is derived from its WACC. The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by Coca-Cola FEMSA’s investors. The cost of debt is based on the interest-bearing borrowings Coca-Cola FEMSA is obliged to service, which is equivalent to the cost of debt based on the conditions that a creditor would assess in the market. Segment-specific risk is incorporated by applying beta factors which are evaluated annually based on publicly available market data. Market participant assumptions are important because, not only do they include industry data for growth rates, management also assesses how the CGU’s position, relative to its competitors, might change over the forecasted period. The key assumptions used for the value-in-use calculations are as follows: •Cash flows were projected based on actual operating results and the five-year business plan. •For discounting cash flows to get the recoverable amount of the units, Coca-Cola FEMSA applies the WACC for each CGU, and the calculation assumes a size premium adjustments. The key assumptions by CGU for impairment testing as of December 31, 2023 were as follows:
CGU |  | Pre-tax WACC |  | Post-tax WACC |  | Expected Annual Long-Term Inflation |  | Expected Volume Growth Rates |
|  |  |  |  |  | 2024‑2028 |  | 2024‑2028 |
Mexico |  | 9.0 | % | 6.3 | % | 4.3 | % | 4.4 | %
Brazil |  | 10.1 | % | 6.8 | % | 3.8 | % | 3.8 | %
Colombia |  | 12.2 | % | 7.7 | % | 4.2 | % | 6.8 | %
Argentina |  | 20.8 | % | 16.1 | % | 70.8 | % | 4.8 | %
Guatemala |  | 9.3 | % | 7.3 | % | 4.0 | % | 14.9 | %
Costa Rica |  | 11.4 | % | 8.8 | % | 2.9 | % | 6.6 | %
Nicaragua |  | 23.3 | % | 16.4 | % | 2.6 | % | 6.5 | %
Panama |  | 11.6 | % | 8.6 | % | 2.0 | % | 7.8 | %
Uruguay |  | 9.7 | % | 7.4 | % | 5.7 | % | 3.7 | %
The key assumptions by CGU for impairment testing as of December 31, 2022 were as follows:
|  | Pre-tax WACC |  | Post-tax WACC |  | Expected Annual Long-Term Inflation |  | Expected Volume Growth Rates |
CGU |  |  |  |  |  | 2023‑2027 |  | 2023‑2027 |
Mexico |  | 9.5 | % | 6.5 | % | 4.3 | % | 2.4 | %
Brazil |  | 11.6 | % | 7.2 | % | 3.9 | % | 4.3 | %
Colombia |  | 13.9 | % | 8.0 | % | 3.9 | % | 9.5 | %
Argentina |  | 27.8 | % | 19.8 | % | 68.0 | % | 4.5 | %
Guatemala |  | 10.2 | % | 7.6 | % | 4.4 | % | 14.8 | %
Costa Rica |  | 15.4 | % | 10.2 | % | 3.3 | % | 6.4 | %
Nicaragua |  | 24.6 | % | 11.8 | % | 4.1 | % | 6.0 | %
Panama |  | 11.0 | % | 8.3 | % | 2.2 | % | 4.0 | %
Uruguay |  | 10.2 | % | 7.4 | % | 5.7 | % | 4.0 | %
Sensitivity to Changes in Assumptions On December 31, 2023, Coca-Cola FEMSA performed an additional impairment sensitivity calculation, taking into account an adverse change in post-tax WACC, according to the country risk premium, using for each country the relative standard deviation between equity and sovereign bonds and an additional sensitivity to the volume of 100 basis points and concluded that no impairment would be recorded.
CGU |  | Change in WACC | Change in Volume Growth CAGR (1) | Effect on Valuation
Mexico |  | +0.6 | p.p. | -1.0 | % | Passes by 3.2x
Brazil |  | +0.8 | p.p. | -1.0 | % | Passes by 0.9x
Colombia |  | +0.9 | p.p. | -1.0 | % | Passes by 1.1x
Argentina |  | +3.3 | p.p. | -1.0 | % | Passes by 0.9x
Guatemala |  | +0.7 | p.p. | -1.0 | % | Passes by 5.4x
Costa Rica |  | +0.8 | p.p. | -1.0 | % | Passes by 4x
Nicaragua |  | +3.3 | p.p. | -1.0 | % | Passes by 0.8x
Panama |  | +0.7 | p.p. | -1.0 | % | Passes by 2.2x
Uruguay |  | +0.3 | p.p. | -1.0 | % | Passes by 2x
(1)Compound Annual Growth Rate (“CAGR”). The values assigned to the key assumptions represent management’s assessment of future trends in the industry and are based on both external sources and internal sources (historical data). Coca-Cola FEMSA consistently applied its methodology to determine CGU specific WACC’s to perform its annual impairment testing. Health Division Impairment Test for cash-generating Units Containing Goodwill and Trademark Rights For the purpose of impairment testing, goodwill and trademark rights are allocated and monitored on an individual country basis by operating segment. The Company has identified its cash-generating units as follows: Mexico, Chile, Colombia and Ecuador. As of December 31, 2023 in Health Division there is a significant carrying amount of goodwill and trademark rights allocated in all countries in which the Company operates as a cash generating unit with a total carrying amount of Ps. 8,695. The aggregate carrying amounts of goodwill and trademark rights allocated to each CGU as of December 31, 2023 are as follows: Mexico Ps. 1,975, Chile Ps. 5,890, Colombia Ps. 634 and Ecuador Ps. 196. The aggregate carrying amounts of goodwill and trademark rights allocated to each CGU as of December 31, 2022 are as follows: Mexico Ps. 2,455, Chile Ps. 7,786, Colombia Ps. 577 and Ecuador Ps. 50. The recoverable amounts are based on the value in use. The value in use of CGUs is determined based on the method of discounted cash flows. The key assumptions used in projecting cash flows are: sales, expected annual long-term inflation, and the WACC used to discount the projected cash flows. The cash flow forecasts could differ from the results obtained over time; however, the Company prepares its estimates based on the current situation of each of the CGUs or group of CGUs. To determine the discount rate, the Company uses the WACC as determined for each of the cash generating units or group of the cash-generating units in real terms and as described in the following paragraphs. The discount rates represent the current market assessment of the risks specific to each CGU or group of CGUs, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the opportunity cost to a market participant, considering the specific circumstances of the Company and its operating segments and is derived from its WACC. Market participant assumptions are important because, not only do they include industry data for growth rates, management also assesses how the CGU’s position, relative to its competitors, might change over the forecasted period. The key assumptions used for the value-in-use calculations are as follows: •Cash flows were projected based on actual operating results and the five-year business plan. •For discounting cash flows to get the recoverable amount of the units, the Company applies the WACC for each CGU, and the calculation assumes a size premium adjustments. The key assumptions by the significant CGU (Chile) in the Health Division (Mexico, Colombia and Ecuador are insignificant) for impairment test as of December 31, 2023 was as follows:
CGU |  | Pre-tax WACC |  | Post-tax WACC |  | Expected Annual Long-Term Inflation 2024‑2028 |  | Expected Sales Growth Rates 2024‑2028 |
Chile |  | 7.3 | % | 6.4 | % | 2.6 | % | 0.2 | %
The key assumptions by the significant CGU in the Health Division for impairment test as of December 31, 2022 was as follows:
CGU |  | Pre-tax WACC |  | Post-tax WACC |  | Expected Annual Long-Term Inflation 2023‑2027 |  | Expected Sales Growth Rates 2023‑2027 |
Chile |  | 9.3 |  | % | 6.5 |  | % | 4.9 |  | % | 0.6 |  | %
The values assigned to the key assumptions represent management’s assessment of future trends in the industry and are based on both external sources and internal sources (historical data). The Company consistently applied its methodology to determine CGU specific WACCs to perform its annual impairment testing. Sensitivity to Changes in Assumptions On December 31, 2023, the Company performed an additional impairment sensitivity calculation, taking into account an adverse change in post-tax WACC, according to the country risk premium, using for each country the relative standard deviation between equity and sovereign bonds and a sensitivity analysis of sales that would be affected considering a contraction in economic conditions as a result of lower purchasing power of customers, which based on management estimation considered to be reasonably possible an effect of 50 basis points in the sale’s CAGR, concluding that no impairment would be recognized. The sensitivity test by the significant CGU in the Health Division as of December 31, 2023 was as follows:
CGU |  | Change in WACC | Change in Sales Growth CAGR | Effect on Valuation
Chile |  | 0.7 | p.p. | (0.5) | % | Passes by 1.85x
Valora impairment testing for cash-generating units containing goodwill. The Company has identified its cash-generating units as a retail food distribution platform located in Europe for impairment testing purposes for goodwill and trademark rights. As of December 31, 2023 in Valora there is a significant carrying amount of goodwill and trademarks allocated in the cash generating unit with a total carrying amount of Ps. 22,519. The recoverable amounts are based on the value in use. The value in use of the CGU is determined based on the method of discounted cash flows. The key assumptions used in projecting cash flows are: sales, expected annual long-term inflation, and the WACC used to discount the projected cash flows. The cash flow forecasts could differ from the results obtained over time; however, the Company prepares its estimates based on the current situation of the CGU. To determine the discount rate, the Company uses the WACC as determined for each of the cash generating units or group of the cash generating units in real terms and as described in following paragraphs. The discount rates represent the current market assessment of the risks specific to the CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the opportunity cost to a market participant, considering the specific circumstances of the Company and its operating segments and is derived from its WACC. Market participant assumptions are important because, not only do they include industry data for growth rates, management also assesses how the CGU’s position, relative to its competitors, might change over the forecasted period. The key assumptions used for the value-in-use calculations are as follows: •Cash flows were projected based on actual operating results and the five-year business plan. •For discounting cash flows to get the recoverable amount of the units, the Company applies the WACC for the CGU, and the calculation assumes a size premium adjustment. The key assumptions by CGU for impairment test as of December 31, 2023 were as follows:
CGU |  | Pre-tax WACC |  | Post-tax WACC |  | Expected Annual Long-Term Inflation 2024‑2028 |  | Expected Sales Growth Rates 2024‑2028 |
Valora |  | 5.8 | % | 5.5 | % | 1.4 | % | 0.2 | %
The values assigned to the key assumptions represent management’s assessment of future trends in the industry and are based on both external sources and internal sources (historical data). The Company consistently applied its methodology to determine CGU specific WACC’s to perform its annual impairment testing. Sensitivity to Changes in Assumptions On December 31, 2023, the Company performed an additional impairment sensitivity calculation, taking into account an effect of 50 basis points in the sale’s compound annual growth rate ("CAGR"), concluding that no impairment would be recognized.
CGU |  | Change in Sales Growth CAGR |  | Effect on Valuation |
Valora |  | (0.5) | % | Passes by 1.42x |

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