Biological assets held by the group consist of agave (Agave Azul
Tequilana Weber) plants. The harvested plants are used during the
production of tequila. The maturity cycle of agave ranges between six and
eight years; based on this, biological assets are classified as mature and
immature. Mature biological assets are measured at fair value less costs to
sell on initial recognition and at the end of each reporting period based on
the present value of future cash flows discounted at an appropriate rate for
Mexico (income approach as per IFRS 13). Immature biological assets
are plants that have not reached the point of maturity because their sugar
content yield and weight is not enough to be harvested and there is no
active market for such plants; consequently the company accounts for
these assets by applying fair valuation using the cost approach
(replacement cost).