What valuation method is used for Bimbo Foods Bakeries Distribution's trade accounts payable?
Bimbo_Foods_Bakeries_Distribution Franchise · 2025 FDDAnswer from 2025 FDD Document
value
The fair value of the Company's financial assets and liabilities is calculated as follows:
The fair values of financial assets and financial liabilities with standard terms and conditions which are traded on active, liquid markets are determined based on their quoted market prices. Derivative financial instruments fall under this category; therefore, these instruments are classified within Level 1 of the fair value hierarchy described below.
The fair value of other financial assets and liabilities carried at fair value is determined in accordance with accepted pricing models, generally based on an analysis of the discounted cash flows.
As of December 31, 2024, 2023 and 2022, the carrying value of financial assets and liabilities does not vary significantly from their fair value.
These derivative financial instruments are considered within level 1 and 2 of the fair value hierarchy.
The valuation of the Company's local bonds was determined based on the market value with prices provided by Valuación Operativa y Referencias de Mercado S.A. de C.V. ("VALMER"), which is an entity supervised by the Mexican National Banking and Securities Commission (CNBV, Spanish acronym) that provides updated prices for financial instruments. This valuation is considered Level 1 in accordance with the hierarchy described below.
Fair value hierarchy
All assets and liabilities for which fair value is measured or disclosed in the consolidated statement of financial position are categorized within one of the following three hierarchy levels based on the data used in the valuation. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
Source: Item 14 — Other Accounts Payable and Accrued Liabilities (FDD pages 312–476)
What This Means (2025 FDD)
Based on the 2025 FDD, Bimbo Foods Bakeries Distribution calculates the fair value of its financial assets and liabilities using accepted pricing models, generally based on an analysis of discounted cash flows. For financial assets and liabilities with standard terms traded on active, liquid markets, quoted market prices are used. Derivative financial instruments fall into this category and are classified within Level 1 of the fair value hierarchy.
The carrying value of financial assets and liabilities does not significantly differ from their fair value as of December 31, 2024, 2023, and 2022. The valuation of the company's local bonds is determined based on market value with prices provided by Valuación Operativa y Referencias de Mercado S.A. de C.V. ("VALMER"), an entity supervised by the Mexican National Banking and Securities Commission. This valuation is considered Level 1 in accordance with the fair value hierarchy.
The fair value measurements are categorized into a three-level hierarchy based on the data used in the valuation, with categorization based on the lowest level of input significant to the fair value measurement. This hierarchy is used for all assets and liabilities for which fair value is measured or disclosed in the consolidated statement of financial position.