Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Income Taxes (Tables)

v3.24.1.u1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Taxes [Abstract]  
Schedule of Income Tax Recognized in Profit or Loss Income tax recognized in profit or loss for the years of 2023, 2022 and 2021 was comprised of the following:
    2023     2022     2021  
                   
Current tax   Ps. 645,521       533,522       791,856  
Deferred tax (benefit) expense     (261,137 )     (16,602 )     22,700  
                         
    Ps. 384,384       516,920       814,556  
Schedule of Reconciliation of Income Tax Expense Recognized from Statutory to Effective ISR Rate Income tax expense recognized at the effective ISR rate differs from income tax expense at the statutory tax rate. Reconciliation of income tax expense recognized from statutory to effective ISR rate is as follows:
    2023     2022     2021  
                   
Profit before income tax   Ps. 1,431,122       1,386,884       2,562,495  
Tax rate     30 %     30 %     30 %
Income tax expense calculated at 30% statutory tax rate     429,337       416,065       768,749  
                         
Inflation effects, net     17,730       3,536       25,039  
Non-deductible expenses (1)     65,978       148,569       5,790  
Share-based payments     1,403       1,780       1,744  
Other items, net     (94,604 )     (53,030 )     13,234  
    Ps. 384,384       516,920       814,556  
   

27

 %     

37

 %     

32

 % 
(1) Includes (i) certain payroll expenses which are partially deductible as grocery vouchers, help for transportation, life and major medical expenses insurance, among others; and (ii) certain cost of sales expenses as samples and obsolescence items.

Realization of deferred tax assets depends on the future generation of taxable income during the period in which the temporary differences will be deductible. Management considers the reversal of deferred tax liabilities and projections of future taxable income to make its assessment on the realization of deferred tax assets. Based on the results obtained in previous years and in future profit and tax projections, management has concluded that it is probable the deferred tax assets will be realized.

 

Composition of the deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances as of December 31, 2023, 2022 and 2021 are presented below:
Schedule of Deferred Tax Asset (Liabilities) Reconciliation of Changes in Deferred Taxes Balances

Composition of the deferred tax asset (liabilities) as well as the reconciliation of changes in deferred taxes balances as of December 31, 2023, 2022 and 2021 are presented below:

Temporary differences  

As of
January 1,
2021

     Accounting effects
from changing
reporting period		     Recognized in profit or loss     As of
December 31,
2021		  
                         
Deferred tax assets:                        
Expected credit loss   Ps. 8,319       11,309       12,799       32,427  
Accruals and provisions     69,681       -       (31,723 )     37,958  
Derivative financial instruments     35,886       -       (35,886 )     -  
Property, plant and equipment     -       -       5,538       5,538  
Leases     7,313       -       (1,949 )     5,364  
                                 
Deferred tax liabilities:                                
Intangible assets     (83,900 )     -       1,920       (81,980 )
Inventories     (34,234 )     (5,337 )     30,483       (9,088 )
Derivative financial instruments     -       -       (7,380 )     (7,380 )
Property, plant and equipment     (10,888 )     -       10,888       -  
Right-of-use assets     (7,465 )     -       2,250       (5,215 )
Other assets and prepaid expenses     (6,959 )     -       (9,640 )     (16,599 )
                                 
Net deferred tax liability   Ps. (22,247 )     5,972       (22,700 )     (38,975 )
Temporary differences   As of
December 31,
2021		     Liability assumed
for subsidiaries’
acquisition		    

 

Recognized in profit or loss

     As of
December 31,
2022		  
                         
Deferred tax assets:                                
Expected credit loss   Ps. 32,427       -       (3,085 )     29,342  
Accruals and provisions     37,958       256,433       99,850       394,241  
Prepaid expenses     -       4,752       351       5,103  
Property, plant and equipment     5,538       -       (5,538 )     -  
Leases     5,364       -       83,103       88,467  
                                 
Deferred tax liabilities:                                
Intangible assets     (81,980 )     (418,327 )     1,920       (498,387 )
Inventories     (9,088 )     -       (18,656 )     (27,744 )
Derivative financial instruments     (7,380 )     4,936       (1,471 )     (3,915 )
Property, plant and equipment     -       (350,521 )     (38,200 )     (388,721 )
Right-of-use assets     (5,215 )     -       (83,397 )     (88,612 )
Other assets and prepaid expenses     (16,599 )     10,700       (18,275 )     (24,174 )
                                 
Net deferred tax liability   Ps. (38,975 )     (492,027 )     16,602       (514,400 )

 

Temporary differences   As of
December 31,
2022		     Recognized in profit or loss     As of
December 31,
2023		  
                   
Deferred tax assets:                  
Expected credit loss   Ps. 29,342       70,801       100,143  
Accruals and provisions     394,241       (92,620 )     301,621  
Costumers’ prepayments     87       1       88  
Non-deductible interest     -       120,236       120,236  
Leases     88,467       27,137       115,604  
                         
Deferred tax liabilities:                        
Intangible assets     (498,387 )     1,920       (496,467 )
Inventories     (27,744 )     10,040       (17,704 )
Derivative financial instruments     (3,915 )     (6,442 )     (10,357 )
Property, plant and equipment     (388,721 )     145,561       (243,160 )
Right-of-use assets     (88,612 )     (18,999 )     (107,611 )
Suppliers’ prepayments     5,016       (12,260 )     (7,244 )
Other assets and prepaid expenses     (24,174 )     9,424       (14,750 )
                         
Net deferred tax liability   Ps. (514,400 )     254,799       (259,601 )
Schedule of Unrecognized Deferred Tax Assets Derived from the acquisition of JAFRA, the Group did not recognize deferred tax assets in the consolidated statement of financial position with respect to the following tax loss carryforwards of the subsidiaries:
As of December 31, 2023  
Originated loss’ year     Life year     Jafra Cosmetics
International, S.A.
de C.V.		     Jafrafin, S.A. de C.V.  
                     
2019     2029   Ps. 8,210     -  
2020     2030     3,547     -  
2021     2031     -     2,793  
2022     2032     9,102     5,722  
          Ps. 20,859     8,515  
As of December 31, 2022  
Originated loss’ year     Life year     Jafra Cosmetics
International, S.A.
de C.V.		     Jafrafin, S.A. de C.V.  
                     
2019     2029   Ps. 27,861     -  
2020     2030     3,376     -  
2021     2031     -     2,659  
          Ps. 31,237     2,659