18. Financial Assets and Liabilities
Set out below is the categorization of the financial instruments, excluding cash and cash equivalents, held by the Company as of December 31, 2016 and 2017:
| December 31, 2016 | ||||||||||||
| Loans and Receivables |
Fair value through profit or loss |
Fair value through OCI |
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Financial Assets: |
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Available for sale marketable securities and other short term investments |
Ps. | 13,393,646 | Ps. | — | Ps. | 41,463,511 | ||||||
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Accounts receivable from subscribers, distributors, |
175,059,881 | — | — | |||||||||
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Related parties |
740,492 | — | — | |||||||||
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Derivative financial instruments |
— | 909,051 | — | |||||||||
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Total |
Ps. | 189,194,019 | Ps. | 909,051 | Ps. | 41,463,511 | ||||||
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Financial Liabilities: |
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Debt |
Ps. | 707,801,403 | Ps. | — | Ps. | — | ||||||
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Accounts payable |
237,265,126 | — | — | |||||||||
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Related parties |
2,971,325 | — | — | |||||||||
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Derivative financial instruments |
— | 17,504,910 | 79,837 | |||||||||
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Total |
Ps. | 948,037,854 | Ps. | 17,504,910 | Ps. | 79,837 | ||||||
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| December 31, 2017 | ||||||||||||
| Loans and Receivables |
Fair value through profit or loss |
Fair value through OCI |
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Financial Assets: |
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|
Available for sale marketable securities and other short term investments |
Ps. | 12,438,019 | Ps. | — | Ps. | 46,682,657 | ||||||
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Accounts receivable from subscribers, distributors, |
163,085,537 | — | — | |||||||||
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Related parties |
868,230 | — | — | |||||||||
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Derivative financial instruments |
— | 8,037,384 | ||||||||||
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Total |
Ps. | 176,391,786 | Ps. | 8,037,384 | Ps. | 46,682,657 | ||||||
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Financial Liabilities: |
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Debt |
Ps. | 697,884,899 | Ps. | — | Ps. | — | ||||||
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Accounts payable |
212,673,407 | — | — | |||||||||
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Related parties |
2,540,412 | — | — | |||||||||
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Derivative financial instruments |
— | 14,359,460 | — | |||||||||
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Total |
Ps. | 913,098,718 | Ps. | 14,359,460 | Ps. | — | ||||||
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Fair value hierarchy
The Company’s valuation techniques used to determine and disclose the fair value of its financial instruments are based on the following hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Variables other than quoted prices in Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and
Level 3: Variables used for the asset or liability that are not based on any observable market data (non-observable variables).
The fair value for the financial assets (excluding cash and cash equivalents) and financial liabilities shown in the consolidated statements of financial position at December 31, 2016 and 2017 is as follows:
| Measurement of fair value at December 31, 2016 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
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Assets: |
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Available for sale marketable securities and other short term investments |
Ps. | 41,463,511 | Ps. | 13,393,646 | Ps. | — | Ps. | 54,857,157 | ||||||||
|
Derivative financial instruments |
— | 909,051 | — | 909,051 | ||||||||||||
|
Pension plan assets |
214,051,693 | 8,175,469 | 118,459 | 222,345,621 | ||||||||||||
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Total |
Ps. | 255,515,204 | Ps. | 22,478,166 | Ps. | 118,459 | Ps. | 278,111,829 | ||||||||
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Liabilities: |
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Debt |
Ps. | 666,457,233 | Ps. | 80,214,836 | Ps. | — | Ps. | 746,672,069 | ||||||||
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Derivative financial instruments |
— | 17,584,747 | — | 17,584,747 | ||||||||||||
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Total |
Ps. | 666,457,233 | Ps. | 97,799,583 | Ps. | — | Ps. | 764,256,816 | ||||||||
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| Measurement of fair value at December 31, 2017 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
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Assets: |
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Available for sale marketable securities and other short term investments |
Ps. | 46,682,657 | Ps. | 12,438,019 | Ps. | — | Ps. | 59,120,676 | ||||||||
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Derivative financial instruments |
— | 8,037,384 | — | 8,037,384 | ||||||||||||
|
Pension plan assets |
218,518,358 | 9,039,270 | 130,976 | 227,688,604 | ||||||||||||
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Total |
Ps. | 265,201,015 | Ps. | 29,514,673 | Ps. | 130,976 | Ps. | 294,846,664 | ||||||||
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Liabilities: |
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Debt |
Ps. | 691,769,785 | Ps. | 63,147,153 | Ps. | — | Ps. | 754,916,938 | ||||||||
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Derivative financial instruments |
— | 14,359,460 | — | 14,359,460 | ||||||||||||
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Total |
Ps. | 691,769,785 | Ps. | 77,506,613 | Ps. | — | Ps. | 769,276,398 | ||||||||
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Fair value of derivative financial instruments is valued using valuation techniques with market observable inputs. To determine its Level 2 fair value, the Company applies different valuation techniques including forward pricing and swaps models, using present value calculations. The models incorporate various inputs including credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves. Fair value of debt Level 2 has been determined using a model based on present value calculation incorporating credit quality of AMX. The Company’s investment in available for sale securities, specifically the investment in KPN, is valued using the quoted prices (unadjusted) in active markets for identical assets. The net realized losses related to derivative financial instruments for the years ended December 31, 2016 and 2017 was Ps. 28,878,632 and Ps.1,515,668, respectively.
For the years ended December 31, 2015, 2016 and 2017, no transfers were made between Level 1 and Level 2 fair value measurement hierarchies.
Changes in liabilities arising from financing activities
| At January 1, 2016 |
Cash flow | Foreing currency exchange and other |
At December 31, 2016 |
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Total liabilities from financing activities |
Ps. | 683,216,744 | Ps. | (61,390,813 | ) | Ps. | 85,975,472 | Ps. | 707,801,403 | |||||||
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| At January 1, 2017 |
Cash flow | Foreing currency exchange and other |
At December 31, 2017 |
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Total liabilities from financing activities |
Ps. | 707,801,403 | Ps. | (27,433,489 | ) | Ps. | 17,516,985 | Ps. | 697,884,899 | |||||||
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