173 SePARATe FInAnCIAL STATeMenTS172 SePARATe FInAnCIAL STATeMenTS MONCLER GROUP 2023

in the fair value of the hedged instrument (at present value) since the inception of the hedge. The ineffective portion of changes in fair value of the derivative financial instrument is recognised immedi- ately in the profit/(loss) for the period.

If the hedge ceases to meet the eligibility criteria or the hedg- ing instrument is sold, matures or is exercised, hedge accounting ceases prospectively. When hedge accounting for cash flow hedg- es ceases, the accrued amount in the cash flow hedge reserve re- mains in equity until, in the case of a hedge of a transaction that results in the recognition of a non-financial asset or non-financial li- ability, it is included in the cost of the non-financial asset or non-fi- nancial liability on initial recognition or, in the case of other cash flow hedges, it is reclassified in profit or loss for the period in the same period or periods in which the hedged expected future cash flows affects profit/(loss) for the period.

If no more hedged future cash flows are expected, the amount shall be reclassified immediately from the cash flow hedge reserve and the reserve for hedging costs to profit/(loss) for the period.

If hedge accounting cannot be applied, gains or losses aris- ing from the fair value measurement of a derivative financial instru- ment are immediately recognised in income statement.

2.8 EMPLOYEE BENEFITS

Short-term employee benefits, such as wages, salaries, social se- curity contributions, paid leave and annual leave due within twelve months of the statement of financial position date and all other fringe benefits are recognised in the year in which the service is rendered by the employee.

Benefits granted to employees which are payable on or after the termination of employment through defined benefit and contri- bution plans are recognised over the vesting period.

deFIned BeneFIT SCHeMeS defined benefit schemes are retirement plans determined based on employees remuneration and years of service.

The Company s obligation to contribute to employees bene- fit plans and the related current service cost is determined by using an actuarial valuation defined as the projected unit credit method. The cumulative net amount of all actuarial gains and losses are rec- ognised in equity within other comprehensive income.

With reference to defined benefit plans, the increase in present value of the defined benefit obligation for employee ser- vice in prior periods (past service cost) is accounted as an ex- pense on a straight-line basis over the average period until the benefits become vested.

The amount recognised as a liability under the defined ben- efit plans is the present value of the related obligation, taking into consideration expenses to be recognised in future periods for em- ployee service in prior periods.

deFIned COnTRIBUTIOn SCHeMeS Contribution made to a defined contribution plan is recognised as an expense in the income statement in the period in which the em- ployees render the related service.

Up to 31 december 2006 Italian employees were eligible to defined benefit schemes referred as post-employment benefit ( TFR ). With the act n. 296 as of 27 december 2006 and subse- quent decrees ( Pension Reform ) issued in early 2007, the rules and the treatment of TFR scheme were changed. Starting from con- tribution vested on or after 1 January 2007 and not yet paid at the reporting date, referring to entities with more than 50 employees, Italian post-employment benefits is recognised as a defined con- tribution plan. The contribution vested up to 31 december 2006 is still recognised as a defined benefit plan and accounted for using actuarial assumptions.

2.9 SHARE-BASED PAYMENTS

The fair value at grant date of the incentives granted to employ- ees in the form of share-based payments that are equity settled is usually included in expenses, with a matching increase in equi-

and applies different write-down rates that reflect the relative ex- pectations of recovery. The Company then applies an analytical val- uation of impaired receivables based on a debtor s reliability and ability to pay the due amounts. The value of receivables is shown in the statement of financial po- sition net of the related bad debt provision. Write-downs made in accordance with IFRS 9 are recognised in the consolidated in- come statement net of any positive effects associated with rever- sals of impairment.

TRAde PAYABLeS And OTHeR CURRenT And nOn-CURRenT PAYABLeS Trade and other payables arise when the Company acquires mon- ey, goods or services directly from a supplier. They are included in current liabilities, except for items with maturity dates greater than twelve months after the reporting date.

Payables are stated, at initial recognition, at fair value, which usually comprises the cost of the transaction, inclusive of transac- tion costs. Subsequently, they are stated at amortised cost using the effective interest method.

FInAnCIAL LIABILITIeS The classification of financial liabilities has not changed since the introduction of IFRS 9. Amounts due to banks and other lenders are initially recognised at fair value, net of directly attributable in- cidental costs, and are subsequently measured at amortised cost, applying the effective interest rate method. If there is a change in the expected cash flows, the value of the liabilities is recalculated to reflect this change on the basis of the present value of the new expected cash flows and the internal rate of return initially deter- mined. Amounts due to banks and other lenders are classified as current liabilities, unless the Company has an unconditional right to defer their payment for at least 12 months after the reference date. Loans are classified as non-current when the company has an un- conditional right to defer payments for at least twelve months from the reporting date.

deRIVATIVe InSTRUMenTS Consistent with the provisions of IFRS 9, derivative financial instru- ments may be accounted for using hedge accounting only when:

the hedged items and the hedging instruments meet the eli- gibility requirements;

at the beginning of the hedging relationship, there is a formal designation and documentation of the hedging relationship, of the Company s risk management objectives and the hedg- ing strategy;

the hedging relationship meets all of the following effective- ness requirements:

there is an economic relationship between the hedged item and the hedging instrument;

the effect of credit risk is not dominant with respect to the changes associated with the hedged risk;

the hedge ratio defined in the hedging relationship is met, including through rebalancing actions, and is con- sistent with the risk management strategy adopted by the Company.

FAIR VALUE HEDGE A derivative instrument is designated as fair value hedge when it hedges the exposure to changes in fair value of a recognised as- set or liability, that is attributable to a particular risk and could af- fect profit or loss. The gain or loss on the hedged item, attributable to the hedged risk, adjusts the carrying amount of the hedged item and is recognised in the consolidated income statement.

CASH FLOW HEDGE When a derivative financial instrument is designated as a hedging instrument for exposure to variability in cash flows, the effective portion of changes in fair value of the derivative financial instrument is recognised among the other components of the comprehensive income statement and stated in the cash flow hedge reserve. The effective portion of changes in fair value of the derivative financial instrument that is recognised in the other components of the com- prehensive income statement is limited to the cumulative change