ABEV Ambev SA

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

  Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  

The accompanying notes are an integral part of these interim consolidated financial statements.

The accompanying notes are an integral part of these interim consolidated financial statements. The consolidated statements of comprehensive income are presented net of income tax. The income tax effects of these items are disclosed in note 8 - Deferred income tax and social contribution.

The accompanying notes are an integral part of these interim consolidated financial statements.

5

The accompanying notes are an integral part of these interim consolidated financial statements.

(i) Net of bank overdrafts.

The accompanying notes are an integral part of these interim consolidated financial statements .

Notes to the interim consolidated financial statements:

8

1.     CORPORATE INFORMATION

(a)      Description of business

Ambev S.A. ( referred to as the “Company” or “Ambev S.A.”), headquartered in São Paulo, Brazil, produces and sells beer, draft beer, soft drinks, other non-alcoholic beverages, malt and food in general.

The Company’s shares and ADRs (American Depositary Receipts) are listed on the Stock Exchange and Mercantile & Futures Exchange (BM&FBOVESPA S.A.) as “ABEV3” and on the New York Stock Exchange (NYSE) as “ABEV”.

The Company’s direct controlling shareholders are Interbrew International B.V. (“IIBV”), AmBrew S.A. (“Ambrew”), both subsidiaries of Anheuser-Busch InBev N.V. (“AB InBev”) and Fundação Antonio e Helena Zerrenner Instituição Nacional de Beneficência (“Fundação Zerrenner”).

The interim financial statements were approved by the Board of Directors on May 2 ^nd , 2017.

(b)    Major corporate events in 2016 and 2017:

There were no significant events related to the three-month period ended March 31,2017.

In December 2016, we acquired Cachoeira de Macacu Bebidas Ltda. from Brasil Kirin Indústria de Bebidas Ltda., a company that owns an operating industrial plant for the production and packaging of beer and non-alcohol  beverages  in the State of Rio de Janeiro for R$478,621.

On May 12, 2016, Ambev and its controlling shareholder, AB InBev, entered into an agreement for the exchange of shareholdings (“Swap”). The execution of the Swap was conditional on the implementation of the merger of the activities of AB InBev and SABMiller Plc (“SABMiller”), which occurred on October 10, 2016. Subsequently, on December 31, 2016, after the implementation of certain preparatory corporate acts, the Swap was effected. Based on the agreement described above, Ambev transferred to AB InBev the equity interest in Keystone Global Corporation - KGC, which held shares in companies domiciled in Colombia, Peru and Ecuador. On the other hand, AB InBev transferred to Ambev its interest in Cerveceria Nacional S. de R.L., a subsidiary domiciled in Panama, which had previously been acquired as a third party.

The value attributed to the transaction is based on a fairness opinion prepared by a specialized company and duly approved by the Board of Directors of Ambev, with abstention from the vote of the directors appointed by AB InBev.

On April, 2016, the Company, through its wholly-owned subsidiary Labatt Breweries, in Canada, acquired the company Archibald Microbrasserie, known for its local beers and seasonal specialties. Furthermore, in Brazil, acquired 66% of the company Sucos do Bem, which has a range of juices, teas and cereal bars. The acquisition amount added was approximately R$155 million.

On January, 2016, Ambev S.A. through its wholly-owned subsidiaries, CRBS S.A. and Ambev Luxembourg, acquired companies to a range of primarily spirit­-based beers and ciders from Mark Anthony Group, by R$1.4 billion.

2.     STATEMENT OF COMPLIANCE

The consolidated financial statements have been prepared using the accounting basis of going concern and are being presented in accordance with IAS 34 - Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”).

The information does not meet all disclosure requirements for the presentation of full annual financial statements and thus should be read in conjunction with the consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) for the year ended December 31 ^st , 2016. To avoid duplication of disclosures which are included in the annual financial statements, the following notes were not subject to full filling:

(a)     Summary of significant accounting policies (Note 3);

(b)    Exceptional items (Note 8);

(c)     Payroll and related benefits (Note 9);

(d)    Additional information on operating expenses by nature (Note 10);

(e)     Intangible assets (Note 15);

(f)     Trade receivable (Note 19);

(g)    Changes in equity (Note 21);

(h)    Interest-bearing loans and borrowings (Note 22);

(i)      Employee benefits (Note 23);

(j)      Trade payables (Note 25);

(k)    Operating leases (Note 28);

(l)      Contingencies (Note 30);

(m) Group Companies (Note 34);

(n)    Insurance (Note 35)

Management declares that all relevant information specific to the financial statements, and only them, are being evidenced and correspond to those used by Management in its business management.

3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There were no significant changes in accounting policies and calculation methods used for the interim financial statements as of March 31, 2017 in relation to those presented in the financial statements for the year ended December 31, 2016.

(a)    Basis of preparation and measurement

The interim financial statements are presented in thousands of Brazilian Real (“R$”), unless otherwise indicated, rounded to the nearest thousand indicated . Depending on the applicable IFRS requirement, the measurement basis used in preparing the interim financial statements is historical cost, net realizable value, fair value or recoverable amount.

(b)    Recently issued IFRS

The reporting standards below were published and are mandatory for future annual reporting periods . There were no early adoption of standards and amendments to standards however the Company is in the evaluation phase of the revised standards and does not expect significant impacts.

IFRS 9 Financial Instruments

The IFRS 9, which will replace IAS 39, introduces a logical approach for the classification of financial assets, which is driven by cash flow characteristics and the business model in which an asset is held; defines a new expected-loss impairment model that will require more effective recognition; and introduces a substantially-reformed model for hedge accounting, with enhanced disclosures about risk management activity. The new hedge accounting model represents a significant overhaul that aligns the accounting treatment with risk management activities. IFRS 9 also reduces the volatility in profit or loss that was caused by changes in the credit risk of liabilities elected to be measured at fair value. IASB issued IFRS 9, which will be effective for annual periods beginning on or after January 1st, 2018. The early adoption is not permitted by the Brazilian Accounting Pronouncements Committee.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 requires revenue recognition to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the Company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements. IASB issued IFRS 15, which will be effective for annual periods beginning on or after January 1st, 2018. The early adoption is not permitted by the Brazilian Accounting Pronouncements Committee.

IFRS 16 – Leases

The IFRS 16, which supersedes IAS 17, replaces the existing lease accounting requirements and represents a significant change in the accounting introducing the standardization of accounting recognition for the lessee and will require the recognition of the right to use and a lease liability. IASB issued IFRS 16, which will be effective for annual periods beginning on or after January 1st, 2019, with earlier adoption.

Other standards, interpretations and amendments to standards

Other new standards, amendments and interpretations mandatory to the financial statements for annual periods beginning after January 1 ^st , 2017 were not listed above because of either their non-applicability to or their immateriality to Ambev S.A.’s consolidated financial statements.

4.     USE OF ESTIMATES AND JUDGMENTS

The preparation of interim financial statements in conformity with IFRS requires Management to make judgments, estimates and assumptions that affect the application of accounting practices and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on past experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for decision making regarding the judgments about carrying amounts of assets and liabilities that are not readily evident from other sources. Actual results may differ from these estimates.

The estimates and assumptions are reviewed on a regular basis. Changes in accounting estimates may affect the period in which they are realized, or future periods.

Although each of its significant accounting policies reflects judgments, assessments or estimates, the Company believes that the following accounting practices reflect the most critical judgments, estimates and assumptions that are important to its business operations and the understanding of its results:

(i) predecessor basis of accounting;

(ii) business combinations;

(iii) impairment;

(iv) provisions;

(v) share-based payments;

(vi) employee benefits;

(vii) current and deferred tax;

(viii) joint arrangements; e

(ix) measurement of financial instruments, including derivatives.

The fair values of acquired identifiable intangibles are based on an assessment of future cash flows. Impairment analyses of goodwill and indefinite-lived intangible assets are performed at least annually and whenever a triggering event occurs, in order to determine whether the carrying value exceeds the recoverable amount.

The company uses its judgment to select a variety of methods including the discounted cash flow method and option valuation models and makes assumptions about the fair value of financial instruments that are mainly based on market conditions existing at each balance sheet date.

Actuarial assumptions are established to anticipate future events and are used in calculating pension and other long-term employee benefit expense and liability. These factors include assumptions with respect to interest rates, rates of increase in health care costs, rates of future compensation increases, turnover rates, and life expectancy.

The company is subject to income tax in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income tax. There are some transactions and calculations for which the ultimate tax determination is uncertain. Some subsidiaries within the Company are involved in tax audits usually in relation to prior years. These audits are ongoing in various jurisdictions at the balance sheet date and, by their nature, these can take considerable time until its conclusion.

(i) The balance refers mostly to Bank Deposit Certificates - CDB, high liquidity, which are readily convertible into known amounts of cash and which are subject to an insignificant risk of change in value.

Write-offs/losses on inventories recognized in the income statement amounted to R$11,430 in the period ended in March 31, 2017 (R$ 11,832 in the period ended in March 31, 2016).

8.         DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION

Deferred taxes for income tax and social contribution taxes are calculated on tax losses, the negative tax basis of social contributions and the temporary differences between the tax bases and the carrying amount in the interim financial statement of assets and liabilities. The rates of these taxes in Brazil, currently set for the determination of deferred taxes, are 25% for income tax and 9% for social contribution. For the other regions, with operational activity, applied rates, are as follow:

Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available to be used to offset temporary differences / loss carry forwards based on projections of future results prepared and based on internal assumptions and future economic scenarios which may therefore change.

The amount of deferred income tax and social contribution by type of temporary difference is detailed as follows:

The Company only offsets the balances of deferred income tax and social contribution assets against liabilities when they are within the same entity and are expected to be realized in the same period.

Tax losses and negative bases of social contribution and temporary deductible differences in Brazil, on which the deferred income tax and social contribution were calculated, have no expiry date.

At March 31, 2017 the assets and liabilities deferred taxes related to combined tax losses has an expected utilization/settlement by temporary differences as follows:

(i) There is no expected realization that exceed the period of 10 years.

As at March 31, 2017, deferred tax assets in the amount of R$543,085 (R$455,616 in December 31, 2016) related to tax losses and temporary differences of subsidiaries abroad were not recorded as the realization is not probable.

Major part of the fiscal losses amount do not have carryforward limit for utilization and the tax losses carried forward in relation to them are equivalent to R$2,059,915 in March 31, 2017 (R$2,285,196 in December 31, 2016).

The net change in deferred income tax and social contribution is detailed as follows:

Leases, capitalizes interests and fixed assets provided as security are not material.

(i) It refers mainly  to the acquisition of Mark Anthony and Cerveceria Nacional in the transaction of stock exchanges.

(ii) It refers to the change in provisional allocations of assets acquired and liabilities assumed in the 2016 acquisitions.

The carrying amount of goodwill was allocated to the different cash-generating units as follows :

(i) It refers to the stock exchange operation occurred in 2013 in result of the adoption of the predecessor basis of accounting.

(ii) The functional currency of Cuba, the Cuban convertible peso (CUC), has fixed parity with the dollar (USD) at balance sheet date.

Additional information regarding the exposure of the Company to the risks of interest rate and foreign currency are disclosed on Note 20 – Financial instruments and risks .

Contract clauses (covenants)

As March 31, 2017, the Company's loans had equal rights to payment without subordination clauses. Except for the credit lines due to FINAME contracted by the Company with Banco Nacional de Desenvolvimento Econômico e Social – BNDES (“BNDES”), where collateral were provided on assets acquired with credit granted. Certain loans and financing contracted by the Company provide for the provision of guarantees to other companies in the group. The financial contracts provide restrictive clauses (covenants), such as: financial covenants, including limitations to new indebtedness; guarantee of company’s existence; Maintenance, in use or in good conditions of use for the business of the Company’s assets; limitation for the acquisition, merger, sale or sale of its assets; Disclosure of financial statements and balance sheets; Non-collateral security in new contracted debts, except if: (i) expressly authorized under the term of loan; (ii) In new debts contracted with financial institutions linked to the Brazilian government – including BNDES – or foreign governments, whether these multilateral financial institutions (World Bank) or localized in jurisdictions in which the Company exercises its activities.

At March 31, 2017, the Company was in compliance with all its contractual obligations for its loans and financings.

(b)    Disbursement expectative

The expected settlement of provisions was based on management’s best estimate at the balance sheet date.

Main lawsuits with probable likelihood of loss:

(a) Income and Sales taxes

In Brazil, the Company and its subsidiaries are involved in several administrative and judicial proceedings related to Income tax, ICMS, IPI, PIS and COFINS taxes. Such proceedings include, among others, tax offsets, credits and judicial injunctions exempting tax payment.

(b) Labor

The Company and its subsidiaries are involved in labor proceedings with former employees or former employees of service providers. The main issues involve overtime and related effects and respective charges.

(c) Civil

The Company is involved in several lawsuits brought by former distributors, mainly in Brazil, which are mostly claiming damages resulting from the termination of their contracts.

The processes with possible probabilities are disclosed in Note 22 - Contingencies .

13.     CHANGES IN EQUITY

(a) Capital stock

(b)    Capital reserves

(b.1) Treasury shares

The treasury shares comprise own issued shares reacquired by the Company and the result on treasury shares that refers to gains and losses related to share-based payments transactions and others.

Follows the changes of treasury shares: