111 COnSOLIdATed FInAnCIAL STATeMenTS110 COnSOLIdATed FInAnCIAL STATeMenTS MONCLER GROUP 2023

The fair value of the amount payable to employees related to share appreciation rights, settled in cash, is recognised as an expense with a corresponding increase in liabilities over the period during which the employees unconditionally become entitled to receive the payment. The liability is measured at year-end and the settle- ment date based on the fair value of the share appreciation rights. Any changes in the fair value of the liability are recognised in prof- it or loss for the year.

2.14 REVENUE RECOGNITION

Based on the five-step model introduced by IFRS 15, the Group recognises revenues after identifying the contracts with its clients and the related services to be provided (transfer of goods and/or services), determining the consideration which it believes it is enti- tled to in exchange for the provision of each of these services and assessing the manner in which these services are provided (at a given time or over time).

Wholesale sales are recognised when goods are dispatched to trade customers, reflecting the transfer of risks and rewards. The provision for returns and discounts, recorded as a revenue adjust- ment, is estimated and accounted based on future expectation, tak- ing into consideration historical return trends and is recorded as a variable component of the contractual consideration with the con- current recognition of a liability for returns and of the correspond- ing asset in the statement of financial position.

Variable components of the consideration (for example, the effect of returns) are recognised in the financial statements only when it is highly probable that there will be no significant adjust- ment to the amount of revenue recognised in the future.

Retail sales are recognised at the date of transactions with fi- nal customers.

Royalties received from licensee are accrued as earned on the basis of the terms of the relevant royalty agreement which is typically based on sales volumes.

Upon receipt of an advance payment from a client, the Group recognises the amount of the advance payment for the obligation to transfer assets in the future under Other current liabilities and derecognises this liability by recognising the revenue when the as- sets are transferred.

The Group recognises the amounts paid to customers as a reduction in revenues when the costs for services cannot be reli- ably estimated or in costs when the costs for services can reliably be estimated.

2.15 BORROWING COSTS

Borrowing costs are recognised on an accrual basis taking into consideration interest accrued on the net carrying amount of finan- cial assets and liabilities using the effective interest rate method.

2.16 TAXATION

Tax expense, recognised in the consolidated income statement, represents the aggregated amount related to current tax and de- ferred tax.

Current taxes are determined in accordance with enforced rules established by local tax authorities. Current taxes are rec- ognised in the consolidated income statement for the period, ex- cept to the extent that the tax arises from transactions or events which are recognised directly either in equity or in other compre- hensive income.

deferred tax liabilities and assets are determined based on temporary taxable or deductible differences arising between the tax bases of assets and liabilities and their carrying amounts in the Group Consolidated Financial Statements. Current and deferred tax assets and liabilities are offset when income taxes are levied by the same tax authority and when there is a legally enforceable right to offset the amounts.

deferred tax liabilities and assets are determined using tax rates that have been enacted by the reporting date and are expect-

ed to be enforced when the related deferred income tax asset is re- alised or the deferred tax liability is settled. deferred tax assets and liabilities are not discounted.

deferred tax assets recognised on tax losses and on deduct- ible differences are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

Tax liabilities include the estimate of risks associated with uncertainties on the tax treatments adopted for determining in- come taxes in accordance with the new IFRIC 23. These uncertain- ties can arise from: i) unclear or complex tax rules; ii) changes in tax regulations or clarifications by tax authorities; iii) ongoing tax audits and/or disputes; iv) public information on ongoing tax assessments and/or disputes involving other entities.

Legislative decree no. 209 of 27 december 2023 implement- ed directive no. 2022/eU/2523, regarding Global Minimum Tax , with the explicit aim of ensuring, starting from 1 January 2024, a minimum level of taxation for groups with revenues exceeding eu- ro 750 million. The legislation originates from the rules formulated in the OeCd and is commonly known as Pillar II .

The Company falls within the scope of application of this regulation.

Based on the information known or reasonably estimable at the date of preparation of these financial statements, the Compa- ny s exposure to any taxes arising from the Pillar II regulation is as- sessed as not significant.

The Group has applied the temporary exception introduced in 2023 to IAS 12 with respect to the accounting requirements for deferred taxes related to Pillar II rules.

2.17 EARNINGS PER SHARE

The Group presents the basic and diluted earnings per share. The basic earnings per share is calculated by dividing the profit or loss attributable to holders of the Company shares by the weighted average of the number of shares for the financial year (defined as equal to the share capital), adjusted to consider any treasury shares held. The diluted earnings per share is calculated by adjusting the profit or loss attributable to shareholders and the weighted average of the number of company shares as defined above, to consider the effects of all potential shares with a dilution effect.

2.18 SEGMENT INFORMATION

For the purposes of IFRS 8 Operating Segments, the Group s busi- ness can be classified to two operating segments, relating to the Moncler and the Stone Island business, aggregated into a single seg- ment, with similar characteristics to those required by the Standard.

2.19 FAIR VALUE

IFRS 13 is the only point of reference for the fair value measure- ment and related disclosures when such an assessment is required or permitted by other standards. Specifically, the principle defines fair value as the consideration received for the sale of an asset or the amount paid to settle a liability in a regular transaction between market participants at the measurement date. In addition, the new standard replaces and provides for additional disclosures required in relation to fair value measurements by other accounting stan- dards, including IFRS 7.

IFRS 13 establishes a hierarchy that classifies within different lev- els the inputs used in the valuation techniques necessary to mea- sure fair value. The levels, presented in a hierarchical order, are as follows:

level 1: Fair values measured using quoted prices (unadjust- ed) in active markets for identical assets or liabilities;

level 2: it Fair values measured using inputs other than quot- ed prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);