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Taxes (Tables)
 12 Months Ended
Dec. 31, 2019
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Summary of Major Components of Income Tax Expense
The major components of income tax expense for the years ended December 31, 2019, 2018 and 2017 are:
 
 
  
2019
 
  
2018
 
  
2017
 
Current tax expense
  
Ps.
 11,652
 
  
Ps.
 10,480
 
  
Ps.
 18,592
 
Deferred tax expense (income):
  
   
  
   
  
   
Origination and reversal of temporary differences
  
 
127
 
  
 
491
 
  
 
(7,546
) 
(Recognition) of tax losses, net
  
 
(1,201
) 
  
 
(927
) 
  
 
(823
) 
Change in the statutory rate
  
 
(102
) 
  
 
125
 
  
 
(10
) 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total deferred tax income expense (benefit)
  
 
(1,176
) 
  
 
(311
) 
  
 
(8,379
) 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total income taxes
  
Ps.
10,476
 
  
 
Ps. 10,169
 
  
Ps.
10,213
 
 
  
 
 
 
  
 
 
 
  
 
 
 
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:
  
2019
   2018   2017 
Unrealized loss on cash flow hedges
  
Ps.
(391
) 
  Ps.(293)   Ps.(191) 
Exchange differences on translation of foreign operations
  
 
(1,667
) 
   (2,647)    387 
Remeasurements of the net defined benefit liability
  
 
(371
) 
   287    (154) 
Share of the other comprehensive income of equity accounted investees
  
 
288
 
   989    (1,465) 
  
 
 
   
 
 
   
 
 
 
Total income tax benefit recognized in OCI
  
Ps.
 (2,141
) 
  Ps. (1,664)   Ps. (1,423) 
  
 
 
   
 
 
   
 
 
 
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, 2019, 2018 and 2017 is as follows:
 
   
2019
  2018  2017 
Mexican statutory income tax rate
  
 
30.0
% 
  30.0%   30.0% 
Difference between book and tax inflationary values and translation effects
  
 
(2.2
%) 
  (4.0%)   (5.7%) 
Annual inflation tax adjustment
  
 
0.2
% 
  (1.2%)   0.5% 
Difference between statutory income tax rates
  
 
0.9
% 
  1.8%   1.2% 
Repatriation of capital benefit decree
  
 
—  
 
  —     (22.6%) 
Non-deductible
expenses
  
 
4.5
% 
  3.2%   2.6% 
Non-taxable
income
  
 
(1.0
%) 
  (0.5%)   —   
Effect of changes in Argentina tax law
  
 
(0.3
%) 
  (0.9%)   —   
Income tax credits
  
 
—  
 
  —     (2.0%) 
Venezuela deconsolidation effect
  
 
—  
 
  —     28.6% 
Others
  
 
0.3
% 
  1.8%   (4.1%) 
  
 
 
  
 
 
  
 
 
 
  
 
32.4
% 
  30.2%   28.6% 
  
 
 
  
 
 
  
 
 
 
Schedule of Deferred Income Tax
Deferred Income Tax Related to:
 
 
   
                  
   
                  
   
                  
   
                  
   
                  
 
 
  
Consolidated Statement
of Financial Position as of
 
 
Consolidated Statement
of Income
 
 
  
December 31,
2019
 
 
December 31,
2018
 
 
2019
 
 
2018
 
 
2017
 
Allowance for doubtful accounts
  
Ps.
 (437
) 
 
Ps.
 (416
) 
 
Ps.
 (43
) 
 
Ps.
 93
 
 
Ps.
16
 
Inventories
  
 
76
 
 
 
80
 
 
 
(6
) 
 
 
(27
) 
 
 
(71
) 
Other current assets
  
 
256
 
 
 
75
 
 
 
182
 
 
 
(31
) 
 
 
34
 
Property, plant and equipment, net
  
 
(4,068
) 
 
 
(3,841
) 
 
 
(320
) 
 
 
(851
) 
 
 
(2,349
) 
Investments in equity accounted investees
  
 
(5,482
) 
 
 
(5,979
) 
 
 
7
 
 
 
40
 
 
 
(5,094
) 
Other assets
  
 
137
 
 
 
212
 
 
 
59
 
 
 
(82
) 
 
 
(155
) 
Finite useful lived intangible assets
  
 
(111
) 
 
 
271
 
 
 
(345
) 
 
 
627
 
 
 
207
 
Indefinite lived intangible assets
  
 
10,788
 
 
 
10,331
 
 
 
1,220
 
 
 
758
 
 
 
968
 
Post-employment and other long-term employee benefits
  
 
(1,067
) 
 
 
(1,058
) 
 
 
(2
) 
 
 
(148
) 
 
 
(77
) 
Derivative financial instruments
  
 
(9
) 
 
 
21
 
 
 
(31
) 
 
 
(63
) 
 
 
(171
) 
Provisions
  
 
(1,216
) 
 
 
(2,761
) 
 
 
1,359
 
 
 
1,122
 
 
 
(636
) 
Temporary
non-deductible
provision
  
 
(3,183
) 
 
 
(1,400
) 
 
 
(1,797
) 
 
 
(293
) 
 
 
(144
) 
Employee profit sharing payable
  
 
(430
) 
 
 
(403
) 
 
 
8
 
 
 
(27
) 
 
 
(11
) 
Tax loss carryforwards
  
 
(10,309
) 
 
 
(9,558
) 
 
 
(1,201
) 
 
 
(927
) 
 
 
(547
) 
Tax credits to recover
(2)
  
 
(1,855
) 
 
 
(1,855
) 
 
 
(122
) 
 
 
(109
) 
 
 
(1,059
) 
Other comprehensive income
(1)
  
 
(596
) 
 
 
229
 
 
 
29
 
 
 
(54
) 
 
 
(224
) 
Exchange differences on translation of foreign operations in OCI
  
 
3,959
 
 
 
5,202
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
Other liabilities
  
 
533
 
 
 
193
 
 
 
(3
) 
 
 
(324
) 
 
 
948
 
Right of use from leases, net
  
 
(561
) 
 
 
—  
 
 
 
(577
) 
 
 
—  
 
 
 
—  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred tax income
  
   
 
   
 
Ps.
  (1,583
) 
 
Ps.
 (296
) 
 
Ps.
 (8,355
) 
Deferred tax income net recorded in share of the profit of equity accounted investees
  
   
 
   
 
 
407
 
 
 
(15
) 
 
 
(24
) 
 
  
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
Deferred tax income, net
  
   
 
   
 
Ps.
(1,176
) 
 
Ps.
 (311
) 
 
Ps.
 (8,379
) 
 
  
   
 
   
 
 
 
 
 
 
 
 
 
 
 
 
Deferred income taxes, net
  
 
(13,575
) 
 
 
(10,657
) 
 
   
 
   
 
   
Deferred tax asset
  
 
(20,521
) 
 
 
(16,543
) 
 
   
 
   
 
   
Deferred tax liability
  
 
Ps.  6,946
 
 
Ps.
5,886
 
 
   
 
   
 
   
 
  
 
 
 
 
 
 
 
 
   
 
   
 
   
 
(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.
Schedule of Deferred Tax related to Other Comprehensive Income (AOCI)
Deferred tax related to Accumulated Other Comprehensive Income (“AOCI”)
 
Income tax related to items charged or
recognized directly in AOCI as of the year:
  
2019
 
  
2018
 
Unrealized loss on derivative financial instruments
  
Ps.
 (36
) 
  
Ps.
 361
 
Remeasurements of the net defined benefit liability
  
 
(560
) 
  
 
(132
) 
 
  
 
 
 
  
 
 
 
Total deferred tax loss related to AOCI
  
Ps.
 (596
) 
  
Ps.
229
 
 
  
 
 
 
  
 
 
 
Schedule of Changes in Net Deferred Income Tax Asset
The changes in the balance of the net deferred income tax asset are as follows:
 
   
2019
   2018   2017 
Balance at the beginning of the period
  
Ps.
 (10,657
) 
  Ps. (9,720)   Ps. (1,016) 
Deferred tax provision for the period
  
 
(1,176
) 
   (311)    (8,218) 
Deferred tax income net recorded in share of the profit of equity accounted investees
  
 
(406
) 
   165    (67) 
Acquisition of subsidiaries
  
 
(382
) 
   (316)    (367) 
Effects in equity:
      
Unrealized (gain) on cash flow hedges
  
 
(391
) 
   (445)    (83) 
Exchange differences on translation of foreign operations
  
 
(2,121
) 
   (1,762)    (1,472) 
Remeasurements of the net defined benefit liability
  
 
(204
) 
   543    131 
Retained earnings of equity accounted investees
  
 
384
 
   54    (38) 
Cash flow hedges in foreign investments
  
 
425
 
   310    (540) 
Restatement effect of the period and beginning balances associated with hyperinflationary economies
  
 
953
 
   438    1,689 
Disposal of subsidiaries
  
 
—  
 
  
 
387
 
   —   
Deconsolidation of subsidiaries
  
 
—  
 
   —     
 
261
 
  
 
 
   
 
 
   
 
 
 
Balance at the end of the period
  
Ps.
 (13,575
) 
  Ps. (10,657)   Ps. (9,720) 
  
 
 
   
 
 
   
 
 
 
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
 
2020
  
Ps.
 825
 
2021
  
 
351
 
2022
  
 
221
 
2023
  
 
227
 
2024
  
 
610
 
2025
  
 
4,876
 
2026
  
 
4,706
 
2027
  
 
35
 
2028
  
 
2,247
 
2029
and thereafter
  
 
3,984
 
No expiration (Brazil and Colombia)
  
 
14,454
 
  
 
 
 
  
Ps.
 32,536
 
  
 
 
 
Summary of Changes in the Balance of Tax Loss Carryforwards
The changes in the balance of tax loss carryforwards are as follows:
 
   
2019
   2018 
Balance at beginning of the period  
Ps.
 29,941
 
  Ps. 29,487 
Derecognized  
 
(377
) 
   (306) 
Additions  
 
7,194
 
   4,124 
Usage of tax losses
  
 
(2,947
) 
   (1,385) 
Translation effect of beginning balances  
 
(1,275
) 
   (1,979) 
  
 
 
   
 
 
 
Balance at end of the period  
Ps.
 32,536
 
  Ps. 29,941