Company: AKO-B
Filing Date: 2025-11-12
Form Type: 6-K
Source: 0001104659-25-109492
Chunk: 21

Company: ANDINA BOTTLING CO INC
Filing Date: 2025-11-12
Form: 6-K
Chunk 21
---
The Company and its subsidiaries use derivative
financial instruments to mitigate risks relating to changes in foreign currency and exchange rates associated with raw materials, and
loan obligations. Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently
re-measured at their fair value at each closing date. Derivatives are accounted as financial assets when the fair value is positive and
as financial liabilities when the fair value is negative. The method of recognizing the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

2.10.1 Derivative financial instruments designated as cash flow hedges

At the inception of the transaction, the group
documents the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking
various hedging transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The effective
portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive
income. The gain or loss relating to the ineffective portion is recognized immediately in the consolidated income statement within "other
gains (losses).”

Amounts accumulated in equity are reclassified
to profit or loss in the periods when the hedged item affects profit or loss (for example, when foreign currency denominated financial
liabilities are translated into their functional currencies). The gain or loss relating to the effective portion of cross currency swaps
hedging the effects of changes in foreign exchange rates are recognized in the consolidated income statement within "foreign exchange
differences.” When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately
recognized in the consolidated income statement.

2.10.2 Derivative financial instruments not designated for hedging

The fair value of derivative financial instruments
that do not qualify for hedge accounting pursuant to IFRS are immediately recognized in the income statement under "Other income
and losses". The fair value of these derivatives is recorded under "other current financial assets" or "other current
financial liabilities" in the statement of financial position.

The Company does not