169 SePARATe FInAnCIAL STATeMenTS168 SePARATe FInAnCIAL STATeMenTS MONCLER GROUP 2023

the asset or from the cash-generating unit, gross of tax effects, by applying an appropriate discount rate that reflects market time value of money and the risks inherent to the asset. An impairment loss is recognised for the amount by which the carrying amount ex- ceeds its recoverable amount.

With the exception of impairment losses recognised on good- will, when the circumstances that led to the loss no longer exist, the carrying amount of the asset is increased to its recoverable amount and cannot exceed the carrying amount that would have been de- termined had there been no loss in value. The reversal of an impair- ment loss is recognised immediately in the income statement.

2.6 LEASED ASSETS

On 13 January 2016, the IASB published the new standard IFRS 16 Leases, which replaces IAS 17. This standard was endorsed by the european Union, with its publication on 9 november 2017. IFRS 16 is effective for financial statements commencing on or after 1 Jan- uary 2019. The new standard eliminates the difference in the recog- nition of operating and finance leases, even despite elements that simplify its adoption, and introduces the concept of control in the definition of a lease. To determine whether a contract is a lease, IF- RS 16 establishes that the contract must convey the right to control the use of an identified asset for a given period of time.

At the lease commencement date, the Company recognis- es the right of use asset and lease liability. The right of use asset is initially valued at cost, including the amount of the initial measure- ment of the lease liability, adjusted for the rent payments made on or before the commencement date, increased by the initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condi- tion required by the terms and conditions of the lease, net of the re- ceived lease incentives. The right of use asset is amortised on a straight-line basis from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company at the end of the lease term. In this case, the right of use asset will be am- ortised over the useful life of the underlying asset, determined on the same basis as that of property and machinery. In addition, the right of use asset is regularly decreased for any impairment loss- es and adjusted to reflect any changes deriving from subsequent remeasurement of the lease liability.

The Company values the lease liability at the present value of the payments due for unpaid leases at the commencement date, discounting them using the interest rate implicit in the lease.

The payments due for the lease included in the measurement of the lease liability include:

fixed payments (including substantially fixed payments); payments due for lease which depend on an index or rate,

initially measured using an index or rate on the commence- ment date;

amounts that are expected to be paid as a residual value guarantee; and

the payments due for the lease in an optional renewal period if the Company is reasonably certain to exercise the renew- al option, and early termination cancellation penalties, unless the Company is reasonably certain not to terminate the lease in advance.

The lease liability is measured at amortised cost using the effective interest criterion and remeasured in the event of a change in the fu- ture payments due for the lease deriving from a change in the index or rate, in the event of a change in the amount that the Company ex- pects to pay as a guarantee on the residual value or when the Com- pany changes its measurement with reference to the exercise or otherwise of a purchase, extension or cancellation option or in the event of revision of in-substance fixed payments due.

When the lease liability is remeasured, the lessee makes a corresponding change in right of use asset. If the right of use asset carrying value is reduced to zero, the lessee recognises the change in profit/(loss) for the year.

AMORTISATIOn OF InTAnGIBLe ASSeTS WITH A deFInITe USeFUL LIFe Intangible assets with a definite useful life are amortised on a straight line basis over their estimated useful lives as described in the following table:

Category Depreciation period License rights Based on market conditions within the licence period or legal limits to use the assets Software From 3 to 5 years Other intangible assets Based on market conditions generally within the period of control over the asset

2.3 NON-CURRENT ASSETS AVAILABLE FOR SALE AND DISCONTINUED OPERATIONS

non-current assets available for sale and discontinued operations are classified as available for sale when their values are recoverable mainly through a probable sale transaction. In such conditions, they are valued at the lower of their carrying value or fair value, net of cost to sell if their value is mainly recoverable through a sale trans- action instead of continued use.

discontinued operations are operations that: include a separate line of business or a different geographi-

cal area; are part of a single coordinated plan for the disposal of a sep-

arate major line of business or geographical area of activity; consist of subsidiaries acquired exclusively for the purpose

of being sold.

In the income statement, non-current assets held for sale and dis- posal groups that meet the requirements of IFRS 5 to be defined as discontinued operations , are presented in a single caption that in- cludes both gains and losses, as well as losses or gains on disposal and the related tax effect. The comparative period is subsequently restated in accordance with IFRS 5.

As far as the financial position is concerned, non-current as- sets held for sale and disposal groups that meet the requirements of IFRS 5 are reclassified as current assets and liabilities in the pe- riod in which such requirements arise. The comparative financial statements are not restated nor reclassified.

2.4 INVESTMENTS

Investments in subsidiaries, associates and others are accounted for as follows:

at cost, inclusive of any additional charges; or in accordance with IFRS 9.

The Company recognises dividends from subsidiaries, associates and others in its income statement when the right to receive such dividends has materialised.

2.5 IMPAIRMENT OF NON-FINANCIAL ASSETS

At least once a year the Company verifies whether there is any in- dication that intangible assets with a definite useful life, property, plant and equipment and investements have become impaired. If such evidence exists, the carrying amount of the assets is reduced to its recoverable amount.

Assets with an indefinite useful life are not subject to amor- tisation and are tested annually or more frequently for impairment, whenever events or changes in circumstance indicate that the car- rying amount may not be recoverable.

When the recoverable amount for individual asset cannot be reliably estimated, the Company determines the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of an asset s fair value less costs to sell and value-in-use. The Group determines the value in use as the present value of future cash flows expected to be derived from