Grupo Aval Acciones Y Valores S.A. | CIK:0001504764 | 3

  • Filed: 4/27/2018
  • Entity registrant name: Grupo Aval Acciones Y Valores S.A. (CIK: 0001504764)
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    • ifrs-full:DisclosureOfFairValueMeasurementExplanatory

    NOTE 5 – ESTIMATION OF FAIR VALUE
     
    The fair value of the financial assets and liabilities traded in active markets (such as financial assets in debt securities, equity securities and derivatives actively listed in stock exchanges or interbank markets) is based on dirty prices supplied by a price vendor.
     
    An active market is a market wherein transactions for assets or liabilities are carried out with sufficient frequency and volume in order to provide price information on an ongoing basis. A dirty price includes accrued and pending interest on the security, as from the date of issuance or last payment of interest, until the date in which the purchase and sale operation is due. The fair value of financial assets and liabilities that are not traded in an active market is determined through appraisal techniques determined by the price supplier or by the management of Grupo Aval’s entities. Appraisal techniques used for non-standardized financial instruments such as options, foreign exchange swaps and derivatives of the over-the-counter market, which include the use of interest rate or currency assessment curves built by providers and extrapolated to the specific conditions of the instrument being appraised, discounted cash flow analysis, options pricing models and other valuation techniques commonly used by market participants who rely mostly on market data and the least possible on specific data of entities.
     
    Grupo Aval may use models developed internally for financial instruments with no active markets. These models are usually based on valuation techniques and methods generally standardized in the financial sector. The valuation models are mainly used for appraising financial equity instruments not listed on the stock exchange, debt certificates and other debt instruments for which the markets were or have been inactive during the financial period. Some inputs of these models may not be observable in the market and are therefore estimated based on assumptions.
     
    The output of a model is always an estimate or approximation of a value that cannot be determined with certainty, and the valuation techniques used may not fully reflect all the factors relevant to the positions of Grupo Aval. Therefore, the appraisals are adjusted, if necessary, to allow for additional factors, including country risk, liquidity risks and counterparty risks.
     
    The fair value hierarchy has the following levels:
     
    ·
    Level 1 inputs are quoted prices (unadjusted) in active markets for assets or liabilities identical to those which the entity can access as of the date of measurement.
     
    ·
    Level 2 inputs are inputs different than quoted prices included in Level 1 that are observable for the asset or liability, whether directly or indirectly in non-active markets.
     
    ·
    Level 3 inputs are unobservable inputs for the asset or liability.
     
    The level in the fair value hierarchy within which fair value measurement is classified in whole is determined based on the input of the lowest level that is most significant for measuring its total fair value. For such purpose, the relevance of an input is assessed in connection with the measurement of the total fair value. Financial instruments that are listed in markets that are not deemed active, but which are valued based in accordance with quoted market prices, quotes from price vendors or alternative price sources supported by observable inputs, are classified in Level 2.
     
    If a fair value measurement uses observable inputs that require significant adjustments based on unobservable inputs, this measurement is classified as Level 3. The assessment of the importance of a particular input to the measurement of fair value in whole requires judgment, taking into account specific factors of the asset or liability.
     
    Determining what is deemed as 'observable' requires a significant judgment by Grupo Aval. Grupo Aval considers as observable data the market data which is already available, distributed or updated by the price suppliers, and it is reliable and verifiable, with no property rights, and provided by independent sources which are actively involved in the reference market.
     
    5.1
    Measurements of Fair Value on a Recurring Basis
     
    Measurements of fair value on a recurring basis are those required or allowed in statement of financial position at the end of each accounting period.
     
    The following table presents an analysis, within the hierarchy of fair value, of Grupo Aval´s assets and liabilities (by class), measured at fair value as of December 31, 2017 and 2016 on a recurring basis.
     
    December 31, 2017
     
     
     
    Level 1
     
     
    Level 2
     
     
    Level 3
     
     
    Total
     
    Assets
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Held for trading debt securities
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    In Colombian Pesos
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by Colombian Government
     
    Ps.
    1,104,829
     
     
    Ps.
    124,777
     
     
    Ps.
    -
     
     
    Ps.
    1,229,606
     
    Securities issued or secured by other entities of the Colombian Government
     
     
    -
     
     
     
    48,355
     
     
     
    -
     
     
     
    48,355
     
    Securities issued or secured by other financial entities
     
     
    -
     
     
     
    833,860
     
     
     
    -
     
     
     
    833,860
     
    Securities issued or secured by entities of the Non-financial sector
     
     
    -
     
     
     
    17,869
     
     
     
    -
     
     
     
    17,869
     
    Other
     
     
    -
     
     
     
    37,442
     
     
     
    12,975
     
     
     
    50,417
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    In Foreign Currency
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by Colombian Government
     
     
    -
     
     
     
    1,613
     
     
     
    -
     
     
     
    1,613
     
    Securities issued or secured by other entities of the Colombian Government
     
     
    -
     
     
     
    21,709
     
     
     
    -
     
     
     
    21,709
     
    Securities issued or secured by foreign Governments
     
     
    -
     
     
     
    92,931
     
     
     
    -
     
     
     
    92,931
     
    Securities issued or secured by central banks
     
     
    -
     
     
     
    34,095
     
     
     
    -
     
     
     
    34,095
     
    Securities issued or secured by other financial entities
     
     
    -
     
     
     
    303,665
     
     
     
    -
     
     
     
    303,665
     
    Other
     
     
    -
     
     
     
    16,416
     
     
     
    -
     
     
     
    16,416
     
    Total held for trading debt securities
     
    Ps.
    1,104,829
     
     
    Ps.
    1,532,732
     
     
    Ps.
    12,975
     
     
    Ps.
    2,650,536
     
    Investments in debt securities available-for-sale
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    In Colombian Pesos
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by the Colombian Government
     
     
    7,668,545
     
     
     
    224,009
     
     
     
    -
     
     
     
    7,892,554
     
    Securities issued or secured by other entities of the Colombian Government
     
     
    -
     
     
     
    92,008
     
     
     
    -
     
     
     
    92,008
     
    Securities issued or secured by other financial entities
     
     
    -
     
     
     
    263,633
     
     
     
    -
     
     
     
    263,633
     
    Securities issued or secured by entities of the Non-financial sector
     
     
    -
     
     
     
    2,326
     
     
     
    -
     
     
     
    2,326
     
    Other
     
     
    -
     
     
     
    563
     
     
     
    6,627
     
     
     
    7,190
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    In Foreign Currency
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by Colombian Government
     
     
    -
     
     
     
    1,592,371
     
     
     
    -
     
     
     
    1,592,371
     
    Securities issued or secured by other entities of the Colombian Government
     
     
    -
     
     
     
    570,694
     
     
     
    -
     
     
     
    570,694
     
    Securities issued or secured by foreign Governments
     
     
    29,604
     
     
     
    2,074,793
     
     
     
    -
     
     
     
    2,104,397
     
    Securities issued or secured by central banks
     
     
    -
     
     
     
    1,356,874
     
     
     
    -
     
     
     
    1,356,874
     
    Securities issued or secured by other financial entities
     
     
    456,354
     
     
     
    2,898,090
     
     
     
    -
     
     
     
    3,354,444
     
    Securities issued or secured by entities of the Non-financial sector
     
     
    -
     
     
     
    322,143
     
     
     
    -
     
     
     
    322,143
     
    Other
     
     
    -
     
     
     
    231,493
     
     
     
    -
     
     
     
    231,493
     
    Total investments in debt securities available-for sale
     
    Ps.
    8,154,503
     
     
    Ps.
    9,628,997
     
     
    Ps.
    6,627
     
     
    Ps.
    17,790,127
     
    Total investments in debt securities
     
    Ps.
    9,259,332
     
     
    Ps.
    11,161,729
     
     
    Ps.
    19,602
     
     
    Ps.
    20,440,663
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Equity securities
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Trading equity securities
     
     
    28,659
     
     
     
    2,095,160
     
     
     
    25,341
     
     
     
    2,149,160
     
    Investments in equity securities available-for-sale
     
     
    768,336
     
     
     
    55,697
     
     
     
    -
     
     
     
    824,033
     
    Total equity securities
     
    Ps.
    796,995
     
     
    Ps.
    2,150,857
     
     
    Ps.
    25,341
     
     
    Ps.
    2,973,193
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Held for trading Derivatives
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Currency Forward
     
     
    -
     
     
     
    222,377
     
     
     
    1,578
     
     
     
    223,955
     
    Bond Forward
     
     
    -
     
     
     
    731
     
     
     
    -
     
     
     
    731
     
    Interest Rate Swap
     
     
    -
     
     
     
    52,970
     
     
     
    -
     
     
     
    52,970
     
    Currency Swap
     
     
    -
     
     
     
    33,104
     
     
     
    -
     
     
     
    33,104
     
    Currency Options
     
     
     
     
     
     
    17,632
     
     
     
    -
     
     
     
    17,632
     
    Total held for trading derivatives
     
    Ps.
    -
     
     
    Ps.
    326,814
     
     
    Ps.
    1,578
     
     
    Ps.
    328,392
     
    Hedging Derivatives
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Currency Forward
     
     
    -
     
     
     
    55,261
     
     
     
    -
     
     
     
    55,261
     
    Total hedging derivatives
     
    Ps.
    -
     
     
    Ps.
    55,261
     
     
    Ps.
    -
     
     
    Ps.
    55,261
     
    Other financial assets at fair value through profit or loss
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Financial assets in concession contracts
     
     
    -
     
     
     
    -
     
     
     
    2,282,611
     
     
     
    2,282,611
     
    Total financial assets designated at fair value
     
    Ps.
    10,056,327
     
     
    Ps.
    13,694,661
     
     
    Ps.
    2,329,132
     
     
    Ps.
    26,080,120
     
    Non- financial assets
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Biological assets
     
     
    -
     
     
     
    -
     
     
     
    66,139
     
     
     
    66,139
     
    Investment properties
     
     
    -
     
     
     
    -
     
     
     
    783,794
     
     
     
    783,794
     
    Total non- financial assets
     
    Ps.
    -
     
     
    Ps.
    -
     
     
    Ps.
    849,933
     
     
    Ps.
    849,933
     
    Total assets at fair value on recurring basis
     
    Ps.
    10,056,327
     
     
    Ps.
    13,694,661
     
     
    Ps.
    3,179,065
     
     
    Ps.
    26,930,053
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Liabilities
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Trading Derivatives
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Currency Forward
     
     
    -
     
     
     
    142,760
     
     
     
    1,812
     
     
     
    144,572
     
    Bond Forward
     
     
    -
     
     
     
    1,107
     
     
     
    -
     
     
     
    1,107
     
    Interest Rate Swap
     
     
    -
     
     
     
    40,693
     
     
     
    -
     
     
     
    40,693
     
    Currency Swap
     
     
    -
     
     
     
    79,263
     
     
     
    -
     
     
     
    79,263
     
    Currency Options
     
     
    -
     
     
     
    33,030
     
     
     
    -
     
     
     
    33,030
     
    Total trading derivatives
     
    Ps.
     
     
    Ps.
    296,853
     
     
    Ps.
    1,812
     
     
    Ps.
    298,665
     
    Hedging Derivatives
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Currency Forward
     
     
    -
     
     
    Ps.
    13,464
     
     
    Ps.
    -
     
     
    Ps.
    13,464
     
    Total hedging derivatives
     
    Ps.
    -
     
     
     
    13,464
     
     
     
    -
     
     
     
    13,464
     
    Total liabilities at fair value on recurring basis
     
    Ps.
    -
     
     
    Ps.
    310,317
     
     
    Ps.
    1,812
     
     
    Ps.
    312,129
     
     
    December 31, 2016
     
     
     
    Level 1
     
     
    Level 2
     
     
    Level 3
     
     
    Total
     
    Assets
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Held for trading debt securities
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    In Colombian Pesos
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by Colombian Government
     
    Ps.
    887,218
     
     
    Ps.
    78,521
     
     
    Ps.
    -
     
     
    Ps.
    965,739
     
    Securities issued or secured by other entities of the Colombian Government
     
     
    -
     
     
     
    38,400
     
     
     
    -
     
     
     
    38,400
     
    Securities issued or secured by other financial entities
     
     
    -
     
     
     
    737,884
     
     
     
    -
     
     
     
    737,884
     
    Securities issued or secured by entities of the Non-financial sector
     
     
    -
     
     
     
    18,657
     
     
     
    -
     
     
     
    18,657
     
    Other
     
     
    -
     
     
     
    54,085
     
     
     
    12,210
     
     
     
    66,295
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    In Foreign Currency
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by Colombian Government
     
     
    -
     
     
     
    19,716
     
     
     
    -
     
     
     
    19,716
     
    Securities issued or secured by other entities of the Colombian Government
     
     
    330
     
     
     
    20,747
     
     
     
    -
     
     
     
    21,077
     
    Securities issued or secured by foreign Governments
     
     
    -
     
     
     
    88,095
     
     
     
    -
     
     
     
    88,095
     
    Securities issued or secured by central banks
     
     
    -
     
     
     
    74,727
     
     
     
    -
     
     
     
    74,727
     
    Securities issued or secured by other financial entities
     
     
    -
     
     
     
    313,129
     
     
     
    -
     
     
     
    313,129
     
    Other
     
     
    -
     
     
     
    183
     
     
     
    -
     
     
     
    183
     
    Total held for trading debt securities
     
    Ps.
    887,548
     
     
    Ps.
    1,444,144
     
     
    Ps.
    12,210
     
     
    Ps.
    2,343,902
     
    Investments in debt securities available-for-sale
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    In Colombian Pesos
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by the Colombian Government
     
     
    8,281,946
     
     
     
    922,232
     
     
     
    -
     
     
     
    9,204,178
     
    Securities issued or secured by other entities of the Colombian Government
     
     
    -
     
     
     
    79,435
     
     
     
    -
     
     
     
    79,435
     
    Securities issued or secured by other financial entities
     
     
    -
     
     
     
    120,795
     
     
     
    -
     
     
     
    120,795
     
    Securities issued or secured by entities of the Non-financial sector
     
     
    -
     
     
     
    17,923
     
     
     
    -
     
     
     
    17,923
     
    Other
     
     
    -
     
     
     
    685
     
     
     
    15,167
     
     
     
    15,852
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    In Foreign Currency
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by Colombian Government
     
     
    -
     
     
     
    1,371,029
     
     
     
    -
     
     
     
    1,371,029
     
    Securities issued or secured by other entities of the Colombian Government
     
     
    22,550
     
     
     
    467,327
     
     
     
    -
     
     
     
    489,877
     
    Securities issued or secured by foreign Governments
     
     
    -
     
     
     
    2,083,345
     
     
     
    -
     
     
     
    2,083,345
     
    Securities issued or secured by central banks
     
     
    -
     
     
     
    538,731
     
     
     
    -
     
     
     
    538,731
     
    Securities issued or secured by other financial entities
     
     
    375,798
     
     
     
    2,580,127
     
     
     
    -
     
     
     
    2,955,925
     
    Securities issued or secured by entities of the Non-financial sector
     
     
    80,638
     
     
     
    500,152
     
     
     
    -
     
     
     
    580,790
     
    Other
     
     
    -
     
     
     
    204,853
     
     
     
    -
     
     
     
    204,853
     
    Total investments in debt securities available-for-sale
     
    Ps.
    8,760,932
     
     
    Ps.
    8,886,634
     
     
    Ps.
    15,167
     
     
    Ps.
    17,662,733
     
    Total investments in debt securities
     
    Ps.
    9,648,480
     
     
    Ps.
    10,330,778
     
     
    Ps.
    27,377
     
     
    Ps.
    20,006,635
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Equity securities
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Trading equity securities
     
     
    3,233
     
     
     
    1,744,381
     
     
     
    -
     
     
     
    1,747,614
     
    Investments in equity securities available-for-sale
     
     
    655,096
     
     
     
    74,683
     
     
     
    -
     
     
     
    729,779
     
    Total equity securities
     
    Ps.
    658,329
     
     
    Ps.
    1,819,064
     
     
    Ps.
    -
     
     
    Ps.
    2,477,393
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Held for trading Derivatives
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Currency Forward
     
     
    -
     
     
     
    391,370
     
     
     
    -
     
     
     
    391,370
     
    Interest Rate Swap
     
     
    -
     
     
     
    39,780
     
     
     
    -
     
     
     
    39,780
     
    Currency Swap
     
     
    -
     
     
     
    44,594
     
     
     
    -
     
     
     
    44,594
     
    Currency Options
     
     
    -
     
     
     
    26,313
     
     
     
    -
     
     
     
    26,313
     
    Interest Rate Options
     
     
    -
     
     
     
    152
     
     
     
    -
     
     
     
    152
     
    Total held for trading derivatives
     
    Ps.
    -
     
     
    Ps.
    502,209
     
     
    Ps.
    -
     
     
    Ps.
    502,209
     
    Hedging Derivatives
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Currency Forward
     
     
    -
     
     
     
    128,479
     
     
     
    -
     
     
     
    128,479
     
    Total hedging derivatives
     
    Ps.
    -
     
     
    Ps.
    128,479
     
     
    Ps.
    -
     
     
    Ps.
    128,479
     
    Other financial assets designated at fair value through profit or loss
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Financial assets in concession contracts
     
     
    -
     
     
     
    -
     
     
     
    2,072,674
     
     
     
    2,072,674
     
    Total financial assets designated at fair value
     
    Ps.
    -
     
     
    Ps.
    -
     
     
    Ps.
    2,072,674
     
     
    Ps.
    2,072,674
     
    Non- financial assets
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Biological assets
     
     
    -
     
     
     
    -
     
     
     
    48,002
     
     
     
    48,002
     
    Investment properties
     
     
    -
     
     
     
    -
     
     
     
    610,188
     
     
     
    610,188
     
    Total non- financial assets
     
    Ps.
    -
     
     
    Ps.
    -
     
     
    Ps.
    658,190
     
     
    Ps.
    658,190
     
    Total assets at fair value on recurring basis
     
    Ps.
    10,306,809
     
     
    Ps.
    12,780,530
     
     
    Ps.
    2,758,241
     
     
    Ps.
    25,845,580
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Liabilities
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Trading Derivatives
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Currency Forward
     
     
    -
     
     
     
    408,903
     
     
     
    -
     
     
     
    408,903
     
    Securities Forward
     
     
    -
     
     
     
    1,492
     
     
     
    -
     
     
     
    1,492
     
    Interest Rate Swap
     
     
    -
     
     
     
    25,827
     
     
     
    -
     
     
     
    25,827
     
    Currency Swap
     
     
    -
     
     
     
    164,906
     
     
     
    -
     
     
     
    164,906
     
    Currency Options
     
     
    -
     
     
     
    39,567
     
     
     
    -
     
     
     
    39,567
     
    Total trading derivatives
     
    Ps.
    -
     
     
    Ps.
    640,695
     
     
    Ps.
    -
     
     
    Ps.
    640,695
     
    Hedging Derivatives
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Currency Forward
     
     
    -
     
     
     
    43,436
     
     
     
    -
     
     
     
    43,436
     
    Total hedging derivatives
     
    Ps.
    -
     
     
    Ps.
    43,436
     
     
    Ps.
    -
     
     
    Ps.
    43,436
     
    Total liabilities at fair value on recurring basis
     
    Ps.
    -
     
     
    Ps.
    684,131
     
     
    Ps.
    -
     
     
    Ps.
    684,131
     
     
    5.2
    Items Measurements at Fair Value on a Non-recurring Basis
     
    Grupo Aval is required, on a nonrecurring basis to adjust the carrying value of certain assets and liabilities or provide valuation allowances. These assets or liabilities primarily include impaired collateralized loans and non-current assets held for sale. The fair value of these assets which are classified as Level 3 are determined using pricing models, discounted cash flow methodologies, a current replacement cost or similar techniques, using internal models or external experts with sufficient experience and knowledge of the real estate market or of assets being appraised. Generally, these appraisals are carried out by references to market data or based on the replacement cost, when sufficient market data is not available.
     
    The following table present Grupo Aval’s assets and liabilities, classified within the fair value hierarchy, which are measured on a nonrecurring basis as of December 31, 2017 and 2016 at fair value less cost of sale:
     
    December 31, 2017
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Level 1
     
     
    Level 2
     
     
    Level 3
     
     
    Total
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Impaired collateralized loans
     
    Ps.
      -
     
     
    Ps.
          -
     
     
    Ps.
    701,948
     
     
    Ps.
    701,948
     
    Non- current assets held for sale
     
     
    -
     
     
     
    -
     
     
     
    101,382
     
     
     
    101,382
     
     
     
    Ps.
    -
     
     
    Ps.
    -
     
     
    Ps.
    803,330
     
     
    Ps.
    803,330
     
     
    December 31, 2016
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Level 1
     
     
    Level 2
     
     
    Level 3
     
     
    Total
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Impaired collateralized loans
     
    Ps.
        -
     
     
    Ps.
       -
     
     
    Ps.
    657,080
     
     
    Ps.
    657,080
     
    Non- current assets held for sale
     
     
    -
     
     
     
    -
     
     
     
    259,528
     
     
     
    259,528
     
     
     
    Ps.
    -
     
     
    Ps.
    -
     
     
    Ps.
    916,608
     
     
    Ps.
    916,608
     
     
    5.3
    Fair Value determination
     
    Level 1 financial instruments are those traded in an active market. Their fair value was established according to quoted prices (unadjusted) supplied by the price vendor, which are determined using the weighted averages of transactions carried out during the trading day.
     
    Level 2 financial instruments as those traded in non-active market, the following table provides information about valuation techniques and significant inputs when measuring assets and liabilities.
     
     
     
    Valuation technique
     
    Significant inputs (1)
    ASSETS
     
     
     
     
    Investments in debt securities at fair value through profit or loss
     
     
     
     
    In Colombian Pesos
     
     
     
     
    Securities issued or secured by the Colombian Government
     
    Discounted cash flow
     
    Estimated Prices (2)
    Securities issued or secured by Colombian government entities
     
    Discounted cash flow
     
    Estimated Prices (2)
    Securities issued or secured by other financial entities
     
    Discounted cash flow
     
    Estimated Prices (2)
    Yield and Margin
    Securities issued or secured by non-financial sector entities
     
    Discounted cash flow
     
    Estimated Prices (2)
    Other
     
    Discounted cash flow
     
    Estimated Prices (2)
    Yield and Margin
     
     
     
     
    Valuation technique
    Significant inputs (1)
    In Foreign Currency
     
     
     
     
    Securities issued or secured by the Colombian Government
     
    Market Price
     
    Quoted Prices
    Estimated Prices (2)
    Securities issued or secured by Colombian government entities
     
    Discounted cash flow
     
    Estimated Prices (2)
    Securities issued or secured by foreign governments
     
    -     Internal Model
    -     Market Price
     
    -    Discounted cash flows using yields from similar securities outstanding
    -    Market Price or price calculated based on benchmarks set by price providers methodologies
    -    Bloomberg Generic / Bloomberg Valuation
    Securities issued or secured by Central Banks
     
    -     Internal Model
    -     Market Price
     
    -    Discounted cash flows using yields from similar securities outstanding
    -    Market Price or price calculated based on benchmarks set by price providers methodologies
    Securities issued or secured by other financial entities
     
    -     Discounted cash flow
    -     Internal Model
    -     Market Price
     
    -    Estimated Prices (2)
    -    Quoted Price or price calculated based on benchmarks set by price providers methodologies
    -    Bloomberg Generic / Bloomberg Valuation
    Securities issued or secured by non-financial sector entities
     
    -     Market Price
     
    -    Average Price
    -    Quoted Price
    -    Bloomberg Generic
    Other
     
    -     Discounted cash flow
    -     Internal Model
    -     Market Price
     
    -    Estimated Prices (2)
    -    Theoretical Price Mutual Funds which by the end of the month capitalize or pay interests
    -    Quoted Price
     
     
     
     
     
    Equity securities
     
     
     
     
    Corporate Stock
     
    Market Price
     
    Estimated Prices  (2)
    Investment Funds
     
    Market Price
     
    Market value of underlying assets, less management and administrative fees
    Pension and severance funds (3)
     
    Market Price
     
    Market value of underlying assets, less management and administrative fees
     
     
     
     
     
    Trading Derivatives
     
     
     
     
    Foreign Currency Forward
     
     
     
    -   Underlying asset price
    Debt securities Forward
     
     
     
    -   Currency curve by underlying asset
    Interest rate Swap
     
    Discounted cash flow
     
    -   Forward Exchange rates curve of the operation’s currency
    Cross Currency Swap
     
     
     
    -   Implicit curves of Exchange rates forwards
    Swap (others)
     
     
     
    -   Swap curves by underlying asset
    Currency Options
     
     
     
    -   Implicit volatilities matrixes and curves
     
     
     
     
     
    Hedging Derivatives
     
     
     
     
    Currency Forward
     
    Discounted cash flow
     
    Curves by currency
     
     
     
     
     
    LIABILITIES
     
     
     
     
    Derivatives held for trading
     
     
     
     
    Foreign Currency Forward
     
     
     
    -   Underlying asset price
    Debt securities Forward
     
     
     
    -   Currency curve by underlying asset
    Interest rate Swap
     
    Discounted cash flow
     
    -   Forward Exchange rates curve of the operation’s currency
    Currency Swap
     
     
     
    -   Implicit curves of exchange rates forwards
    Swap (others)
     
     
     
    -   Swap curves by underlying asset
    Currency Options
     
     
     
    -   Implicit volatilities matrixes and curves
     
     
     
     
     
    Hedging Derivatives
     
     
     
     
    Foreign Currency Forward
     
     
     
    -   Underlying asset price
    Interest rate Forward
     
     
     
    -   Currency curve by underlying asset
     
     
    Discounted cash flow
     
    -   Forward Exchange rates curve of the operation’s currency
    Interest rate Swap
     
     
     
    -   Implicit curves of Exchange rates forwards
     
     
     
     
    -   Swap curves by underlying asset
     
     
     
     
    -   Implicit volatilities matrixes and curves
     
    (1)
    Supplied by the price vendor
    (2)
    Estimated Price: A valuation model is made by the price vendor when it is not able to supply quoted prices (unadjusted) for each security. This model is the basis for the construction of the valuation margin of the securities that is represented on the assigned curve or reference rate. This margin remains constant on the assigned curve or reference rate when calculating the theoretical valuation price.
    (3)
    The subsidiary Porvenir S. A. according to Colombian rules is required to invest to 1% of its total assets under management from severance and mandatory pension funds.
       
    The following table provides information about valuation techniques and significant unobservable inputs when measuring Level 3 assets and liabilities at recurring fair value.
     
     
     
    Valuation technique
     
    Significant inputs
    ASSETS
     
     
     
     
    Investments in debt securities at fair value through profit or loss
     
     
     
     
    In Colombian Pesos
     
     
     
     
    Other
    Discounted cash flow
     
    Projected payments flow of mortgage securitizations (1)
     
     
     
     
     
    Other financial assets
     
     
     
     
    Assets under concession contracts
     
    Discounted cash flow
     
    -   Free-cash flow from concession contracts
    -   Concession contract’s maturity period
    -   Perpetuity value of the year “n” free-cash flow
    -   Present value of the discounted residual value at WACC.
    -   Financial income: annual adjustment of the financial asset’s value.
     
    The detail of valuation process for financial assets in concession arrangements are outlined in (2)
     
     
     
     
     
    Non-financial assets
     
     
     
     
    Biological assets
     
    Discounted cash flow
     
    The processes used to collect data and determine the fair value of biological assets are described in (3).
    Investment properties
     
    Discounted cash flow
     
    The processes used to collect data and determine the fair value of biological assets are described in (4)
     
    (1)
    Mortgage-Backed Securities
     
    Titularizadora Colombiana S.A issued mortgage securitizations. Following is the valuation under 3 scenarios, these scenarios are based on projections that, consider different prepayment and delinquency assumptions. The following table shows the sensitivity analysis of this fair value under three different scenarios.
     
    December 2017
     
     
    Baseline scenario (i)
     
     
     
    Favorable scenario (ii)
     
     
     
    Unfavorable scenario (iii)
     
    Ps.
    19,602
     
     
    Ps.
    80
     
     
    Ps.
    (95
    )
     
    December 2016
     
     
    Baseline scenario (i)
     
     
     
    Favorable scenario (ii)
     
     
     
    Unfavorable scenario (iii)
     
    Ps.
    27,377
     
     
    Ps.
    302
     
     
    Ps.
    (343
    )
     
    (i)
    Fair value as of December 31, 2017 and 2016 calculated based on valuation scenario, considers 12-month Moving Average Prepayment between 12.4% and 15.8% and 12.3% and 16.0% respectively, and 1 Time Delinquency Curve.
     
    (ii)
    Pre-payment of 10% and 1 time delinquency curve
     
    (iii)
    Pre-payment of 20% and 1 time delinquency curve
     
    (2)
    Financial assets under concession contracts
     
    Promigas and subsidiaries designated some of their financial assets under concession contracts at fair value; the discounted cash flows method of was used to determine their fair value.
     
    The assumptions for the calculation of the financial assets were:
     
    ·
    Financial assets were calculated taking into account the expiration date of each concession contract.
     
    ·
    The calculation was carried out in proportion to the expiration of each of the concession contracts in force.
     
    ·
    Only the operational cash flows of these assets under concession were taken into account.
     
    The components of the calculations are as follows:
     
    ·
    Free cash flow generated solely by assets under concession.
     
    ·
    Expiration period of the concession.
     
    ·
    Amount in-perpetuity of the Free Cash Flow (FCF) of the year, estimated factoring a growth in the residual amount between 3% and 1% for 2017 and 2016, each.
     
    ·
    Current amount of the residual amount Weighted Average Cost of Capital (WACC), estimated taking into account an interest rate between 9.20 % and 8.42% each year.
     
    ·
    Financial Income: Annual adjustment of the amount of the financial asset to WACC (*).
     
    (*) Nominal WACC calculated under the Capital Asset Pricing Model (CAPM) methodology for each concession contract, updated annually. The following variables were used for determining the WACC:
     
    ·
    Beta Unlevered USA (Oil/Gas Distribution): Damodaran. [Betaunlevered 0.69, in 2016]
     
    ·
    Risk Free Rate, Source: Geometric Average 10 years of American bonds “T-Bonds”.
     
    ·
    Marker Return, Source: Geometric Average 10 years Damodaran “Stocks” USA.
     
    ·
    Market Premium: Market Return – Risk Free Rate
     
    ·
    Country Risk Premium: Average last 5 years EMBI (Difference between 10 year Colombian sovereign bonds and 10 year “T-Bonds”). Damodaran
     
    ·
    Emerging Market: Equity Premium Emerging countries (Lambda - Damodaran)
     
    Sensitivity analysis
     
    The following table includes a sensitivity analysis of the assumptions used by Promigas and its subsidiaries in the calculation of fair value of unconditional transfer rights of gas pipelines to Government entities at the expiration date of the contracts. The fair value of the financial asset at December 31, 2017 is Ps. 2,282,611 and Ps. 2,072,674 at December 31, 2016.
     
     
     
    December 31, 2017
     
     
    December 31, 2016
     
    Variable
     
    +100 bps
     
     
    -100 bps
     
     
    +100 bps
     
     
    -100 bps
     
    WACC
     
    Ps.
    (608,164
    )
     
    Ps.
    949,005
     
     
    Ps.
    (534,128
    )
     
    Ps.
    810,001
     
    Growth rate
     
     
    520,052
     
     
     
    (362,867
    )
     
     
    434,225
     
     
     
    (293,491
    )
     
    (3)
    Biological Assets
     
    Fair value of Grupo Aval subsidiaries’ “biological assets”, which correspond to agricultural activities related to biological assets (animals or plants), is estimated based on internal reports prepared by the companies who own such assets. Fair value of biological assets is determined using valuations performed by experienced internal professionals, using discounted cash flow models. Since no comparable market exist for the biological assets, given their nature, their fair value is determined using discounted cash flows models for each biological asset, based on estimated future quantities of crops, prices, harvesting costs, and maintenance and crop yields, among others, discounted using a risk-free rate adjusted by an appropriate risk premium. See note 15.
     
    The main assumptions used for determining the fair value of the principal biological assets are as follows:
     
    1.
    Biological assets growing in rubber crops:
     
    The price of natural rubber was forecasted based on the average of the last 3 years of the Technically Specified Rubber (TSR20) per ton since December, 2015 and averaged with the future prices of the next 3 months Ps. 4.6 (USD $1,542.8) as of December 31, 2017, Ps. 5.5 (USD $1,816.6) as of December 31, 2016 and Ps. 6.7 (USD$2,136) as of December 31, 2015, in order to reflect the behavior of the commodity for an entire economic cycle. Forecasted prices are adjusted annually based on the expected US inflation rate.
     
    Yield per hectare: Based on the crop composition and the planting year of the different clones, we forecasted a stepwise yield per hectare starting in year 7 after plantation and stabilizing after year 10.
     
    Year
     
    Tons of rubber per
    hectare per year
     
    Year 7
     
     
    0.60
     
    Year 8
     
     
    0.90
     
    Year 9
     
     
    1.40
     
    Year 10 and other
     
     
    1.80
     
     
    Costs and administrative expenses: Costs are forecasted considering the different activities incurred during the life of a rubber project. A cost per hectare is forecasted for every key activity such as crop establishment, maintenance of immature plant and maintenance and harvest of mature plants.
     
    Discount rate: Based on the data for the “Farming/Agriculture” sector of Damodaran Online’s Global Markets data base, a cost of equity of 15.23% was defined. Additionally, a cost of debt of 5.84% was defined based on existing debt market conditions. Based on the above, the discount rate, or WACC, was determined to be 11.71%.
     
    2.
    Biological assets growing in African palm crops:
     
    The price of African palm Ps. 1.9 (USD $650.58) per ton as of December 31, 2017 and Ps. 1.8 (USD $606.20) per ton as of December 31, 2016 was forecasted based on the average price of palm oil since 2015, in order to reflect the behavior of the commodity for an entire economic cycle. Forecasted prices are adjusted annually with the expected US inflation rate.
     
    The source of information for international prices for Colombia’s market are the following:
     
    a.
    Crude palm oil: BURSA MALAYSIA DERIVATIVES (BMD) – Crude Palm Oil Futures (FCPO) – Third Position. It is a relevant international market prices, of easy public access, and is provided by transparent and objective source.
     
    b.
    For the price forecast, available future prices (FCPO) were also used.
     
    Yield per hectare: Based on the crop composition and the re-planting year of the crops, which started in 2006, we forecasted a stepwise yield per hectare for each plantation as follows:
     
    Year
     
    Tons of fresh fruit
    per hectare
     
    0 to 3
     
     
    -
     
    4
     
     
    4.25
     
    5
     
     
    9.91
     
    6
     
     
    11.73
     
    7
     
     
    21.58
     
    8 to 25
     
     
    21.80
     
    More than 25
     
     
    36.10
     
     
    Extraction rate: The oil extraction rate (OER) is a factor that defines the amount of crude palm oil that is produced. The OER varies depending on the age of the plantation, and was forecasted based on the following table:
     
    Year
     
    Extraction Rate
    (%)
     
    0 to 3
     
     
    19
     
    4
     
     
    23
     
    5
     
     
    23
     
    6
     
     
    23
     
    7
     
     
    23
     
    8 to 25
     
     
    23
     
    More than 25
     
     
    21
     
    Weighted average
     
     
    22.14
     
     
    Costs and administrative expenses: Costs are forecasted considering the different activities that are incurred during the life of an African palm crop. A cost per hectare is forecasted for every key activity such as crop establishment, maintenance and exploitation, harvest and transport.
     
    Discount rate: Based on the data for the “Farming/Agriculture” sector of Damodaran Online’s Global Markets data base, a cost of equity of 15.23% was defined. Additionally, a cost of debt of 5.84% was defined based on existing debt market conditions. Based on the above, the discount rate, or WACC, was determined at 11.71%.
     
    Sensitivity analysis of Biological Assets at fair value
     
    As a result of its investment in Corficolombiana, Grupo Aval´s assets include certain biological assets, that consist primarily of African palm oil and rubber. Grupo Aval does not produce African palm oil from Malaysia, or sells its product in the Rotterdam market. However, Grupo Aval has knowledge that the price of African palm oil and rubber is highly correlated to trade at both markets.
     
    If the average price of technically specified rubber (TSR20) and crude palm oil (CPO) had been 5% higher or lower in 2017 and 2016, with all the other variables remaining constant and excluding the effect of hedging activities, Grupo Aval’s profits for the period, before taxes, would have been the following, including only the product growing on bearer plants.
     
    Rubber Plantations
     
     
     
    TSR20 reference price
    USD/ton
     
     
    Change in fiscal year-
    end price
     
     
    Value of the biological
    asset
     
     
    Effect on profits
    before taxes
     
     
     
    1,620
     
     
     
    5
    %
     
     
    25,366
     
     
     
    10.762
     
    Dec-17
     
     
    1,543
     
     
     
    -
     
     
     
    24,158
     
     
     
    9.554
     
     
     
     
    1,466
     
     
     
    (5
    )%
     
     
    22,950
     
     
     
    8.346
     
     
     
    1,907
     
     
     
    5
    %
     
     
    15,628
     
     
     
    9.888
     
    Dec-16
     
     
    1,817
     
     
     
    -
     
     
     
    14,606
     
     
     
    8.899
     
     
     
     
    1,726
     
     
     
    (5
    )%
     
     
    13,584
     
     
     
    7.910
     
     
    African Palm Plantations
     
     
     
    CPO reference price
    USD/ton
     
     
    Change in fiscal year-
    end price
     
     
    Value of the biological
    asset
     
     
    Effect on profits
    before taxes
     
     
     
    683
     
     
     
    5
    %
     
     
    27,883
     
     
     
    5.068
     
    Dec-17
     
     
    651
     
     
     
    -
     
     
     
    26,555
     
     
     
    3.740
     
     
     
     
    618
     
     
     
    (5
    )%
     
     
    25,228
     
     
     
    2.412
     
     
     
    637
     
     
     
    5
    %
     
     
    23,109
     
     
     
    5.495
     
    Dec-16
     
     
    606
     
     
     
    -
     
     
     
    21,597
     
     
     
    5.354
     
     
     
     
    576
     
     
     
    (5
    )%
     
     
    20,085
     
     
     
    3.213
     
     
    The fair value of biological assets is also affected by different circumstances in the market such as climate, natural disasters and plagues. The subsidiaries that manage biological assets have taken all the necessary precautions to reduce these risks.
     
    (4)
    Investment properties
     
    Investment properties are recognized at fair value, based on a valuation made at each year-end period, using an independent expert appraisal. While in Colombia, the frequency of transactions in the real state sector is low compared to other more developed markets, management believes there are enough references to assess the fair value of investment properties owned by Grupo Aval and its subsidiaries based on comparable market transactions.
     
    Fire-sales are excluded from the comparable transactions used to estimate the fair-value of investment properties. Management has reviewed the main assumptions used by the independent external appraisers (such as inflation, interest rates, etc.) and believes they are consistent with market conditions at each end of period. However, management believes that the estimation of the fair value of investment properties depends on significant judgement from the independent expert appraisers, and as such, there could be a significant probability that the actual price of sale of a property differs from its fair value.
     
    5.4
    Transfers between level 1 and level 2 of the fair value hierarchy
     
    The following table summarizes the transfer between fair value levels 1 and 2 during 2017 and 2016. In general, transfers between Level 1 and Level 2 in the investment portfolios are due, fundamentally, to changes in the liquidity levels of the securities in the markets.
     
     
     
    December 31, 2017
     
     
    December 31, 2016
     
     
     
    Transfers between:
     
     
    Transfers between:
     
     
     
    Level 2 to
    1
     
     
    Level 1
    to 2
     
     
    Level 2 to
    1
     
     
    Level 1 to
    2
     
    Trading debt securities
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    In Colombian Pesos
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by Colombian Government
     
    Ps.
    -
     
     
    Ps.
    28,153
     
     
    Ps.
    963,794
     
     
    Ps.
    208,526
     
    Securities issued or secured by other financial entities
     
     
           -
     
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    Ps.
    -
     
     
    Ps.
    28,153
     
     
    Ps.
    963,794
     
     
    Ps.
    208,526
     
    In Foreign Currency
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Securities issued or secured by other entities of the Colombian Government
     
    Ps.
    -
     
     
    Ps.
    10,221
     
     
    Ps.
    -
     
     
    Ps.
    -
     
    Securities issued or secured by foreign Governments
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    -
     
    Securities issued or secured by central banks
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    -
     
    Securities issued or secured by other financial entities
     
     
    -
     
     
     
    65,209
     
     
     
    -
     
     
     
    1,547
     
    Securities issued or secured by entities of the Non-financial sector
     
     
    -
     
     
     
    85,552
     
     
     
    -
     
     
     
    -
     
    Other
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    Ps.
    -
     
     
    Ps.
    160,982
     
     
    Ps.
    -
     
     
    Ps.
    1,547
     
     
     
    Ps.
    -
     
     
    Ps.
    189,135
     
     
    Ps.
    963,794
     
     
    Ps.
    210,073
     
     
    There were no transfers of fair values between levels and 2 to or from level 3.
     
    5.5
    Reconciliation Level 3 of the fair value hierarchy
     
    The reconciliation of the balances at the begining of the period to the closing balances with the fair value measurements classified at Level 3 is shows in the following table.
     
     
     
    Financial assets
    in debt
     securities
     
     
    Equity
    instruments
     
     
    Financial assets in
    concession
    arrangements
     
     
    Biological
    assets
     
     
    Investment
    properties
     
    January 1, 2015
     
    Ps.
    36,821
     
     
    Ps.
    -
     
     
    Ps.
    1,738,598
     
     
    Ps.
    202,399
     
     
    Ps.
    366,742
     
    Valuation adjustment with an effect on income
     
     
    2,892
     
     
     
    -
     
     
     
    153,094
     
     
     
    22,922
     
     
     
    104,769
     
    Valuation adjustments with an effect on OCI
     
     
    (3,636
    )
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    -
     
    Additions
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    35,265
     
     
     
    89,679
     
    Sales/disposals
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    (20,374
    )
     
     
    (22,944
    )
    December 31, 2015
     
    Ps.
    36,077
     
     
    Ps.
    -
     
     
    Ps.
    1,891,692
     
     
    Ps.
    240,212
     
     
    Ps.
    538,246
     
    Valuation adjustment with an effect on income
     
     
    750
     
     
     
    -
     
     
     
    180,982
     
     
     
    14,644
     
     
     
    53,680
     
    Valuation adjustments with an effect on OCI
     
     
    (9,450
    )
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    -
     
    Reclassification of bearer plants balance
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    (188,177
    )
     
     
    -
     
    Effects of amendments in accounting policies of bearer plants.
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    (18,108
    )
     
     
    -
     
    Transfers to non-current assets held for sale
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    11,319
     
    Reclassification
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    (1,331
    )
     
     
    (2,539
    )
    Additions
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    21,432
     
     
     
    71,268
     
    Sales/disposals
     
    Ps.
    -
     
     
    Ps.
    -
     
     
    Ps.
    -
     
     
    Ps.
    (20,670
    )
     
    Ps.
    (61,786
    )
    December 31, 2016
     
    Ps.
    27,377
     
     
    Ps.
    -
     
     
    Ps.
    2,072,674
     
     
    Ps.
    48,002
     
     
    Ps.
    610,188
     
    Valuation adjustment with an effect on income
     
     
    765
     
     
     
    -
     
     
     
    209,937
     
     
     
    13,503
     
     
     
    46,675
     
    Valuation adjustments with an effect on OCI
     
     
    (8,540
    )
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    -
     
    Transfers from non-current assets held for sale
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    101,469
     
    Reclassification
     
     
    -
     
     
     
    25,341
     
     
     
    -
     
     
     
    -
     
     
     
    (30,143
    )
    Additions
     
     
    -
     
     
     
    -
     
     
     
    -
     
     
     
    24,409
     
     
     
    84,036
     
    Sales/disposals
     
    Ps.
    -
     
     
    Ps.
    -
     
     
    Ps.
    -
     
     
    Ps.
    (19,775
    )
     
    Ps.
    (28,431
    )
    December 31, 2017
     
    Ps.
    19,602
     
     
    Ps.
    25,341
     
     
    Ps.
    2,282,611
     
     
    Ps.
    66,139
     
     
    Ps.
    783,794
     
     
    5.6
    Fair Value of Financial Assets and Liabilities recognized at Amortized Cost
     
    The following table shows a summary of financial assets and liabilities accounted at amortized cost and valued at fair value, as of December 31, 2017 and 2016 only for disclosure purposes.
     
     
     
    December 31, 2017
     
     
    December 31, 2016
     
     
     
    Carrying
    Amount
     
     
    Fair Value
    Estimate
     
     
    Carrying
    Amount
     
     
    Fair Value
    Estimate
     
    Assets
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Investments in fixed income held-to-maturity (1)
     
    Ps.
    2,899,039
     
     
    Ps.
    2,928,929
     
     
    Ps.
    2,570,486
     
     
    Ps.
    2,558,333
     
    Credit portfolio at  amortized cost (2)
     
     
    160,754,295
     
     
     
    166,303,676
     
     
     
    150,898,732
     
     
     
    159,917,633
     
    Total financial assets
     
    Ps.
    163,653,334
     
     
    Ps.
    169,232,605
     
     
    Ps.
    153,469,218
     
     
    Ps.
    162,475,966
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Liabilities
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Customer deposits (3)
     
    Ps.
    154,885,224
     
     
    Ps.
    154,805,726
     
     
    Ps.
    143,887,055
     
     
    Ps.
    146,778,588
     
    Financial Liabilities (4)
     
     
    45,276,036
     
     
     
    45,413,210
     
     
     
    45,516,281
     
     
     
    46,545,065
     
    Total financial Liabilities
     
    Ps.
    200,161,260
     
     
    Ps.
    200,218,936
     
     
    Ps.
    189,403,336
     
     
    Ps.
    193,323,653
     
     
    (1)
    Financial assets held-to-maturity
     
    Fair value of fixed income investments at amortized cost was determined using the dirty price given by the price supplier, securities in an active market and with a market price for the day of the valuation are classified as level 1, securities with no active market and/or with an estimated price (present value of the flows of a security, discounted with the reference rate and the corresponding margin) given by the supplier are classified as level 2.
     
    (2)
    Credit portfolio at amortized cost
     
    For credit portfolio at amortized cost it fair value was determined using discounted of cash flows models at the interest rates offered by banks for granting new loans, taking into account the credit risk and its maturity; the process of valuation is deemed as level 3.
     
    Accounts receivables and payables are classified as short-term assets and liabilities; in consequence, their fair value are similar to their book value.
     
    (3)
    Customer deposits
     
    The fair value of demand deposits is equal to their carrying value. For fixed-term deposits with maturities of less than 180 days, its fair value is deemed equal to its carrying value. For fixed-term deposits with maturities of more than 180 days, its fair value was estimated using the carrying discounted cash flow models to the interest rates offered by banks in accordance with their maturity. This is considered this as a level 2 valuation.
     
    (4)
    Financial liabilities
     
    For financial liabilities and other short-term liabilities, the carrying value was considered similar to its fair value. The fair value of long-term financial liabilities was determined using the discounted cash flow model at interest rates free of risk adjusted by risk premiums of each entity. The fair value of outstanding bonds is determined according to quoted prices or estimated prices supplied by the price vendor. It is considered that this is a level 2 valuation.