Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 332

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 332
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 a five-year period. The determination of the recoverable amount considered a post-tax discount
rate of12.75% (pre-tax of17.98%) and a long-term growth rate of2.14%. It was concluded that the carrying amount of the CGU did not
exceed its recoverable amount, based on the applied methodologies and assumptions, and therefore, no impairment charges were recorded.

For the years ended December
31, 2024 and 2023, the Company evaluated through an analysis if there were signs of impairment in its long-lived assets and right-of-use
assets, and according to the result, it was concluded there were no signs of impairment.

v) Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit
in its leases; therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that
the Company would have to pay to borrow over a similar term and, with a similar security, the funds necessary to obtain an asset of a
similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company would have to pay,
which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions)
or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs
(such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s
stand-alone credit rating).

vi) Consolidation of North Star Financing Limited

The Company does not hold any ownership interest in North
Star Financing Limited. However, the Company assessed whether it has control over the entity based on the three elements of control defined
in accordance with IFRS 10 “ Consolidated Financial Statements.” Following this assessment, the Company determined that it
is exposed to, or has rights to, variable returns from its involvement with the entity. Additionally, the Company has the current ability
to direct the relevant activities of the entity to those that most significantly affect its returns through its existing decision-making
power.

3. Financial instruments and risk management

Financial risk management

The Company’s activities are exposed to different financial
risks stemming from exogenous variables that are not under their control but whose effects might be potentially adverse such as: (i) market
risk, (ii) credit risk and (iii) liquidity risk.

The Company