Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 321

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 321
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, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term,
a change in the lease payments or a change in the assessment of an option to purchase the underlying asset. When the lease liability is
remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use assets or is recorded in profit or loss if the
Company purchased the underlying asset.

The short-term leases and leases of low-value assets are recognized
as expense on a straight-line basis over the lease term.

During the years ended December 31, 2024, 2023 and 2022, there
werenoimpairment charges recorded in relation to the right-of-use assets.

  iii.      Sale and leaseback  

The Company enters into agreements whereby an aircraft or
engine is sold to a lessor upon delivery and the lessor agrees to lease such aircraft or engine back to the Company.

The Company measures the right-of-use asset arising from the
leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained by the seller-lessee.
Accordingly, the Company recognizes in the consolidated statements of operations only the amount of any gain or loss that relates to the
rights transferred to the buyer-lessor. If the fair value of the consideration for the sale of an asset does not equal the fair value
of the asset, or if the payments for the lease are not at market rates, then the Company adjusts the difference to measure the sale proceeds
at fair value and accounts for any below-market terms as a prepayment of lease payments and any above-market terms as additional financing
provided by the buyer-lessor to the seller-lessee.

First, the sale and leaseback transactions are analyzed within
the scope of IFRS 15 - Revenue from Contracts with Customers, in order to verify whether the performance obligation has been satisfied
and, therefore, are accounted for the sale of the asset. If this requirement is not met, then the transaction constitutes a failed sale
and leaseback and is accounted for as financing transaction. If the requirements related to the performance obligation established in
IFRS 15 are met, the Company measures an asset for right of use that arises from the sale transaction with subsequent lease in proportion
to the book value of the asset related to the right-of-use assets retained by the Company. Consequently, only the gains or losses related
to the rights transferred to the lessor-buyer are recognized.

During