MONCLER ANNUAL REPORT AT 31 DECEMBER 2020CONSOLIDATED FINANCIAL STATEMENTS 9998

The Group recognises the amounts paid to customers as a reduction in revenues when the costs for services cannot be reliably 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 financial assets and liabilities using the effective interest rate method.

2.16. TAXATION

Tax expense, recognised in the consolidated income state- ment, represents the aggregated amount related to current tax and deferred tax.

Current taxes are determined in accordance with en- forced rules established by local tax authorities. Current taxes are recognised in the consolidated income statement for the period, except to the extent that the tax arises from transac- tions or events which are recognised directly either in equity or in other comprehensive income.

Deferred tax liabilities and assets are determined based on temporary taxable or deductible differences arising be- tween the tax bases of assets and liabilities and their carry- ing 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 expected to be enforced when the related deferred income tax asset is realised or the deferred tax liability is settled. De- ferred tax assets and liabilities are not discounted.

Deferred tax assets recognised on tax losses and on de- ductible 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 deter- mining income taxes in accordance with the new IFRIC 23. These uncertainties 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 in- volving other entities.

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 prof- it or loss attributable to holders of the Company shares by the weighted average of the number of shares for the finan- cial 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 purposes of IFRS 8 Operating segments, the Group s busi- ness is conducted as a single operating segment known as the Moncler business.

2.19. FAIR VALUE

IFRS 13 is the only point of reference for the fair value meas- urement 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 standards, in- cluding IFRS 7. IFRS 13 establishes a hierarchy that classifies within different levels the inputs used in the valuation techniques necessary to measure fair value. The levels, presented in a hierarchical order, are as follows: level 1: Fair values measured using quoted prices (unad-

justed) in active markets for identical assets or liabilities; level 2: it Fair values measured using inputs other than

quoted 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);

level 3: Fair values measured using inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).

2.20. PUT & CALL AGREEMENTS WITH MINORITY SHAREHOLDERS

The Group records the financial liabilities relating to put options granted to minority shareholders at the present value of the option exercise price. On the initial recogni- tion of the liability, this value is reclassified from equity by reducing the minority share if the terms and conditions of the put option give the Group access to the economic benefits associated with the share of the capital option. The Group accounts for this share as if it had already been purchased in application of the anticipated interest meth- od. The liability is subsequently restated at each closing date in accordance with the provisions of IFRS 9.

2.21. ACCOUNTING STANDARDS AND RECENTLY PUBLISHED INTERPRETATIONS

ACCOUNTING STANDARDS, AMENDMENTS AND INTERPRETATIONS EFFECTIVE FROM 1 JANUARY 2020

With regard to rent concessions obtained from landlords, the Group has adopted the practical expedient brought in by the amendment to IFRS 16 published by the IASB on 28 May 2020 and ratify on 12 October 2020.

NEW STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE AND NOT EARLY ADOPTED BY THE GROUP

At the date when these annual financial statements were prepared, the European Union s competent authorities concluded the approval process needed for the adoption of the accounting standards and amendments described below. With reference of the applicable principles, the Group has decided not to exercise the option of the early adoption, if applicable.

In addition, at the date of these financial statements, the competent bodies of the European Union had not yet completed their endorsement process for the following accounting standards and amendments:

The Group will comply with these new standards and amendments based on their relevant effective dates when endorsed by the European Union and it will evaluate their potential impacts on the Consolidated Financial Statements.

Document title Issue date Effective from Approval date EU regulation and date of publication

Amendments to references to Conceptual Framework in IFRS standards

March 2018 1 January 2020 29 November 2019 (UE) 2019/2075 6 December 2019

Definition of material (Amendments to IAS 1 and IAS 8) October 2018 1 January 2020 29 November 2019 (UE) 2019/2104 10 December 2019

Reform of the reference indices for the determination of interest rates Amendments to IFRS 9, IAS 39 and IFRS 7)

September 2019 1 January 2020 15 January 2020 (UE) 2020/34 16 January 2020

Definition of business (Amendments to IFRS 3) October 2018 1 January 2020 21 April 2020 (UE) 2020/551 22 April 2020

Covid-19-related rent concessions (Amendments to IFRS 16)

May 2020 1 June 2020 9 October 2020 (UE) 2020/1434 12 October 2020

Document title Issue date Effective from Approval date EU regulation and date of publication

Extension of the temporary extension from the application of IFRS 9 (Amendments to IFRS 4)

June 2020 1 January 2021 15 dicembre 2020 (UE) 2020/2097 16 December 2020

Reform of the reference indices for the determination of interest rates Fase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

August 2020 1 January 2021 13 January 2021 (UE) 2021/25 14 January 2021

Document title Issue date by IASB Effective date of IASB document Approval date by EU

Standards

IFRS 14 Regulatory Deferral Accounts January 2014 1 January 2016 Postponed pending the conclusion of the IASB project on rate-regulated activities .

IFRS 17 Insurance Contracts, including subsequent amendments issued in June 2020

May 2017 June 2020

1 January 2023 TBD

Amendments

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)

September 2014 Deferred until the completion of the IASB project on the equity method

Postponed pending the conclusion of the IASB project on the equity method

Reference to the Conceptual Framework (Amendments to IFRS 3) May 2020 1 January 2022 TBD

Property, plant and equipment: proceeds before intended use (Amendments to IAS 16)

May 2020 1 January 2022 TBD

Onerous contracts Cost of fulfilling a contract (Amendments to IAS 37) May 2020 1 January 2022 TBD

Annual improvements to IFRS Standards (Cycle 2018 2020)

May 2020 1 January 2022 TBD

Classification of Liabilities as Current or Non-current (Amendments to IAS 1), including subsequent amendment issued in July 2020

January 2020 July 2020

1 January 2023 TDB