Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Reconciliation of Changes in Intangible Assets and Goodwill


	Rights to Produce and Distribute Coca-Cola trademark Products			Goodwill			Other indefinite lived intangible assets			Technology Costs and management systems			Development systems			Other amortizables			Total
Balance as of January 1, 2015	Ps.	70,263		Ps.	23,593		Ps.	139		Ps.	2,882		Ps.	1,312		Ps.	345		Ps.	98,534
Purchases		—			—			—			73			458			29			560
Transfer of completed development systems		—			—			—			1,085			(1,085	)		—			—
Effect of movements in exchange rates		(4,992	)		(2,556	)		(19	)		(218	)		(2	)		(44	)		(7,831	)
Changes in value on the recognition of inflation effects		1,121			—			—			—			—			—			1,121
Capitalization of borrowing cost		—			—			—			28			—			—			28

Cost as of December 31, 2015	Ps.	66,392		Ps.	21,037		Ps.	120		Ps.	3,850		Ps.	683		Ps.	330		Ps.	92,412

Balance as of January 1, 2016	Ps.	66,392		Ps.	21,037		Ps.	120		Ps.	3,850		Ps.	683		Ps.	330		Ps.	92,412
Purchases		—			—			—			127			609			2			738
Acquisition from business combinations		9,602			7,856			1,067			247			3			109			18,884
Transfer of completed development systems		—			—			—			304			(304	)		—			—
Disposals		—			—			—			(323	)		—			(2	)		(325	)
Effect of movements in exchange rates		8,124			4,689			61			363			(193	)		36			13,080
Changes in value on the recognition of inflation effects		1,220			—			—			—			—			—			1,220
Capitalization of borrowing cost		—			—			—			11			—			—			11

Cost as of December 31, 2016	Ps.	85,338		Ps.	33,582		Ps.	1,248		Ps.	4,579		Ps.	798		Ps.	475		Ps.	126,020

Balance as of January 1, 2017	Ps.	85,338		Ps.	33,582		Ps.	1,248		Ps.	4,579		Ps.	798		Ps.	475		Ps.	126,020
Purchases		1,288			—			7			179			920			446			2,840
Acquisition from business combinations		3,874			—			—			6			—			64			3,944
		5,192			(6,168	)
Transfer of completed development systems		—			—			—			412			(412	)		—			—
Disposals		—			—			—			—			—			—			—
Effect of movements in exchange rates		(2,318	)		(1,186	)		101			(86	)		(15	)		(52	)		(3,556	)
Changes in value on the recognition of inflation effects		(727	)		—			—			—			—			175			(552	)
Effect Venezuela (Note 3.3)		—			—			—			—			—			(139	)		(139	)

Cost as of December 31, 2017	Ps.	92,647		Ps.	26,228		Ps.	1,356		Ps.	5,090		Ps.	1,291		Ps.	969		Ps.	127,581

Accumulated amortization
Balances as of January 1, 2015	Ps.	—		Ps.	—		Ps.	—		Ps.	(1,273	)	Ps.	—		Ps.	(237	)	Ps.	(1,510	)
Amortization expense		—			—			—			(339	)		—			(35	)		(374	)
Effect of movements in exchange rate		—			—			—			174			—			52			226

Balances as of December 31, 2015		—			—			—			(1,438	)		—			(220	)		(1,658	)
Amortization expense		—			—			—			(427	)		—			(35	)		(462	)
Disposals		—			—			—			249			—			—			249
Effect of movements in exchange rate		—			—			—			(148	)		—			(37	)		(185	)

Balances as of December 31, 2016		—			—			—			(1,764	)		—			(292	)		(2,056	)
Amortization expense		—			—			—			(605	)		—			(42	)		(647	)
Disposals		—			—			—			—			—			—			—
Effect of movements in exchange rate		—			—			—			46			—			184			230
Effect Venezuela (Note 3.3)		—			—			—			—			—			(120	)		(120	)
Impairment Venezuela		(745	)		—			—			—			—			—			(745	)

Balances as of December 31, 2017	Ps.	(745	)	Ps.	—		Ps.	—		Ps.	(2,323	)	Ps.	—		Ps.	(270	)	Ps.	(3,338	)

Balance as of December 31, 2015	Ps.	66,392		Ps.	21,037		Ps.	120		Ps.	2,412		Ps.	683		Ps.	110		Ps.	90,754

Balance as of December 31, 2016	Ps.	85,338		Ps.	33,582		Ps.	1,248		Ps.	2,815		Ps.	798		Ps.	183		Ps.	123,964

Balance as of December 31, 2017	Ps.	91,902		Ps.	26,228		Ps.	1,356		Ps.	2,767		Ps.	1,291		Ps.	699		Ps.	124,243

Disclosure of Aggregate Carrying Amounts of Goodwill and Distribution Rights Allocated to Each CGUl

The aggregate carrying amounts of goodwill and distribution rights allocated to each CGU are as follows:


In millions of Ps.	2017		2016
Mexico	Ps.	56,352	Ps.	55,137
Guatemala		488		499
Nicaragua		484		532
Costa Rica		1,520		1,622
Panama		1,185		1,241
Colombia		5,824		5,988
Venezuela		—		1,225
Brazil		48,345		52,609
Argentina		50		67
Philippinnes		3,882		—

Total	Ps.	118,130	Ps.	118,920

Details of Key Assumptions by CGU for Impairment Test

The key assumptions by CGU for impairment test as of December 31, 2017 were as follows:


CGU	Pre-tax WACC			Post –tax WACC			Expected Annual Long- Term Inflation 2018-2027			Expected Volume Growth Rates 2018-2027
Mexico		7.3	%		5.3	%		3.7	%		2.2	%
Guatemala		13.9	%		10.7	%		4.7	%		7.1	%
Nicaragua		16.6	%		10.6	%		5.0	%		4.9	%
Costa Rica		11.5	%		7.8	%		3.3	%		2.7	%
Panama		8.3	%		6.5	%		2.3	%		3.4	%
Colombia		9.1	%		6.6	%		3.1	%		3.2	%
Brazil		9.7	%		6.2	%		4.1	%		1.3	%
Argentina		11.0	%		7.3	%		10.7	%		3.1	%
Philippinnes		9.7	%		5.9	%		3.6	%		3.4	%

The key assumptions by CGU for impairment test as of December 31, 2016 were as follows:


CGU	Pre-tax WACC			Post –tax WACC			Expected Annual Long- Term Inflation 2017-2026			Expected Volume Growth Rates 2017-2026
Mexico		6.8	%		6.3	%		3.7	%		1.2	%
Guatemala		9.9	%		9.5	%		5.0	%		13.2	%
Nicaragua		10.6	%		10.1	%		4.2	%		5.7	%
Costa Rica		8.4	%		8.3	%		4.4	%		4.7	%
Panama		7.8	%		7.4	%		3.0	%		4.9	%
Colombia		7.9	%		7.5	%		3.2	%		4.0	%
Venezuela		17.5	%		17.0	%		117.3	%		1.0	%
Brazil		8.7	%		8.1	%		4.4	%		2.9	%
Argentina		9.1	%		8.5	%		12.2	%		4.1	%

Sumamry of Detailed Information About Sensitivity to Changes in Assumptions

CGU	Change in WACC			Change in Volume Growth CAGR⁽¹⁾			Effect on Valuation
Mexico		+0.16	%		-1.0	%		Passes by 5.2x
Guatemala		+1.52	%		-1.0	%		Passes by 7.4x
Nicaragua		+4.27	%		-1.0	%		Passes by 3.1x
Costa Rica		+0.64	%		-1.0	%		Passes by 2.3x
Panama		+0.12	%		-1.0	%		Passes by 12.1x
Colombia		+0.19	%		-1.0	%		Passes by 2.5x
Brazil		+0.26	%		-1.0	%		Passes by 3.6x
Argentina		+4.39	%		-1.0	%		Passes by 299x
Philipinnes		+0.46	%		-1.0	%		Passes by 2.1x

⁽¹⁾	Compound Annual Growth Rate (CAGR)