Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 310

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 310
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 will be less than recorded value. The cost of inventories is determined based on the specific identification method
and is recorded as an expense as it is used in operations.

i) Intangible assets

Cost related to the purchase or development of computer software
that is separable from an item of related hardware is capitalized separately measured at cost and amortized over the period in which it
will generate benefits on a straight-line basis. The Company annually reviews the estimated useful lives and residual values of intangible
assets and any changes are accounted for prospectively.

The Company records impairment charges on intangible assets
used in operations when events and circumstances indicate that the assets or related cash generating unit may be impaired and the carrying
amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of (i) its fair value less cost
to sell and (ii) its value in use.

The value in use calculation is based on a discounted cash
flow model, using our projections of operating results for the near future, typically extending no more than five years. The recoverable
amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used
in the calculation. For the years ended December 31, 2024, 2023 and 2022, the Company did not record any impairment loss in the value
of its intangible assets.

Software

Acquired computer software licenses are capitalized on
the basis of cost incurred to acquire, implement and bring the software into use. Costs associated with maintaining computer software
programs are expensed as incurred. In case of development or improvement to systems that will generate probable future economic benefits,
the Company capitalizes software development costs, including directly attributable expenditures on materials, labor and other direct
costs.

Acquired software cost is amortized on a straight-line
basis over its useful life. Licenses and software rights acquired by the Company have finite useful lives and are amortized on a straight - line
basis over the term of the contract. Amortization expense is recognized in the consolidated statements of operations.

j) Guarantee deposits

Guarantee deposits primarily include aircraft maintenance
deposits paid to lessors, deposits for rent of flight equipment and other guarantee deposits. Aircraft and engine deposits are held by
lessors in U. S. dollars and are presented as current assets and non-current assets, based on the recovery dates of each deposit established
in the related agreements (Note 11).

Deposits for