MONCLER ANNUAL REPORT AT 31 DECEMBER 2020CONSOLIDATED FINANCIAL STATEMENTS 8988

LEASE LIABILITIES AND RIGHT OF USE ASSETS

The Group recognises the right of use asset and the liability for the lease. The right of use asset is initially valued at cost, and then subsequently at cost net of accumulated deprecia- tion and impairment losses, and adjusted to reflect the reval- uation of the lease liability.

The Group values the lease liability at the present value of the payments due for unpaid leases at the effective date, discounting them using the interest rate determined taking into account the term of the lease contracts, the currency in which they are denominated, the characteristics of the eco- nomic environment in which the contract was stipulated and the credit adjustment.

The lease liability is subsequently increased by the inter- est accrued on this liability and decreased by the payments due for the lease made and is revalued in the event of a change in the future 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 Group expects to pay as a guarantee on the residual value or when the Group changes its valuation with reference to the exercise or otherwise of a purchase, exten- sion or cancellation option.

Lease contracts in which the Group acts as a lessee may provide for renewal options with effects, therefore, on the duration of the contract. Relative certainty that this option will (or won t) be exercised can influence, even significantly, the amount of lease liabilities and right of use assets.

INCENTIVE SYSTEMS AND VARIABLE REMUNERATION

For the description of the determination of the fair value of share-based incentive payments for the Moncler Group man- agement, please see paragraph 2.13.

For an estimate of financial liabilities related to the pur- chase of minority interests and IFRIC 23: uncertainty over in- come tax treatments see paragraphs 2.20 and 2.16.