Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 324

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 324
---
12 Income Taxes. It does not apply to taxes or levies outside the scope of IAS 12 “ Income Taxes,” nor does it specifically
include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses
the following:

  Whether an entity considers uncertain tax treatments separately.  

  The assumptions an entity makes about the examination of tax treatments by taxation authorities.  

  How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits  

  How an entity considers changes in facts and circumstances.  
 ───────────────────────────────────────────────────────────────

The Company determines whether to consider each uncertain
tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution
of the uncertainty.

The Company applies significant judgment in identifying uncertainties
over income tax treatments. Since the Company operates in a complex multinational environment, it continually assesses whether the interpretation
has an impact on its consolidated financial statements.

Upon adoption of the Interpretation, the Company has considered
whether it has any uncertain tax positions, particularly those relating to transfer pricing. The Company’s and the subsidiaries’
tax filings in different jurisdictions include deductions related to transfer pricing, and the taxation authorities may challenge those
tax treatments. The Company determined, based on its tax compliance and transfer pricing studies, that it is probable that its tax treatments
(including those for the subsidiaries) will be accepted by the taxation authorities. As of December 31, 2024 and 2023, the IFRIC Interpretation
23 did not have an impact on the consolidated financial statements of the Company.

t) Derivative and non-derivative financial instruments
and hedge accounting

The Company mitigates certain financial risks, such as volatility
in the price of jet fuel, adverse changes in interest rates and exchange rate fluctuations, through a risk management program that includes
the use of derivative financial instruments and non-derivative financial instruments.

In accordance with IFRS 9, derivative financial instruments
and non-derivative financial instruments are recognized in the consolidated statement of financial position at fair value. At inception
of a hedge relationship, the Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting,
as well as the risk management objective and strategy for undertaking the hedge. The documentation of the hedging records includes the
hedging strategy and objective, identification of the hedging instrument, the hedged item or transaction, the nature of the risks being