Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 307

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 307
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, cash and cash equivalents consist of cash and short-term
investments.

Management performs an assessment of the cash transactions
carried out by the Company, for available cash and investment activities. These transactions are classified based on the results of this
assessment.

The Company has agreements with financial institutions’
counterparties that process customer credit card transactions for the sale of air travel and other services. These credit card processing
agreements do not have significant cash reserve requirements.

The Company establishes cash reserves as required by a debt
agreement; however, these reserves remain available for withdraw.

e) Short-term investments

Short-term investments consist of fixed-term bank deposits
with maturity from the original purchase date, established in the negotiation and the days stipulated in the
agreements.

f) Financial instruments initial recognition and subsequent
measurement

A financial instrument is any contract that gives rise to
a financial asset for one entity and a financial liability or equity instrument for another entity.

i) Financial assets

Initial recognition

Classification of financial assets and initial recognition

The Company determines the classification and measurement
of financial assets, in accordance with the categories in IFRS 9 “ Financial Instruments,” which are based on both: the characteristics
of the contractual cash flows of these assets and the business model objective for holding them.

Financial assets include those carried at fair value through
profit and losses (“ FVTPL”), whose objective to hold them is for trading purposes (short-term investments), or at amortized
cost, for accounts receivables held to collect the contractual cash flows, which are characterized by solely payments of principal and
interest (“ SPPI”). Derivative financial instruments are also considered financial assets when these represent contractual
rights to receive cash or another financial asset. All of the Company’s financial assets are initially recognized at fair value,
including derivative financial instruments.

Subsequent measurement

The subsequent measurement of financial assets depends on
their initial classification, as is described below:

  Financial assets at FVTPL which include financial assets held for trading.  

  Financial assets at amortized cost, whose characteristics meet the SPPI criteria and were originated to  

  Financial assets at fair value through other comprehensive income (“ OCI”) with recycling of  

Derecognition

A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is derecognized when:

  The rights to receive cash flows from the asset have expired.  

  The Company has transferred its rights to receive cash flows from