Moncler Group | Annual Report 2024 Consolidated Financial Statements 346 Moncler Group | Annual Report 2024 Consolidated Financial Statements 347
1.1 The Group and its core business
The parent company Moncler S.p.A. is a company established
and domiciled in Italy, with its registered of f ice located
at Via Stendhal 47 Milan, Italy, and registration number
of 04642290961.
Moreover, the parent company Moncler S.p.A. is de-facto
controlled by Remo Ruf f ini through Ruf f ini Partecipazioni
Holding S.r.l. (RPH) and Double R S.r.l. (DR): more specif ically,
Remo Ruf f ini owns the entire share capital of RPH, a company
controlling DR which, in turn, as of 31 December 2024
holds a shareholding representing 16.5% of the share capital
of Moncler S.p.A.
The Consolidated Financial Statements as at and for
the yea
r ended 31 December 2024 include the Parent Company
and its subsidiaries (hereafter referred to as the “Group").
To date, the Group's core businesses are the creation,
production and distribution of clothing for men, women
and children, shoes, eyewear and other accessories under
the Moncler and Stone Island brand name.
1.2 Basis for the preparation
of the Consolidated Financial Statements
1.2.1 Relevant accounting principles
The 2024 Consolidated Financial Statements have been prepared
in accordance with International Financial Reporting Standards
(“IFRS") issued by the International Accounting Standards
Board (“IASB") and endorsed by the European Union. IFRS also
includes all International Accounting Standards (“IAS")
and interpretations of the International Financial Reporting
Interpretations Committee (“IFRIC"), previously
known as the Standing Interpretations Committee (“SIC").
The Consolidated Financial Statements include the
consolidated income statement, the consolidated statement
of comprehensive income, the consolidated statement of f inancial
position, the consolidated statement of changes in equity,
the consolidated statement of cash f lows and the explanatory
notes to the Consolidated Financial Statements
122 Presentation of the f inancial statements
The Group presents its consolidated income statement
by destination the method that is considered most representative
for the business at hand This method is in fact consistent
with the internal reporting and management of the business
With reference to the consolidated statement of f inancial
position a basis of presentation has been chosen which
makes a distinction between current and noncurrent assets
and liabilities in accordance with the provisions of paragraph
60 and thereafter of IAS 1
The consolidated statement of cash f lows is prepared under
the indirect method.
In accordance with the provisions of IAS 24, related-party
transactions with the Group and their impact, if signif icant,
on the consolidated statement of f inancial position, consolidated
income statement and consolidated statement of cash f lows
are reported below.
The Consolidated Financial Statements are presented
in thousands of Euros while, unless otherwise indicated,
the data contained in the explanatory notes are presented
in millions of Euros.
1.2.3 Basis for measurement
The Consolidated Financial Statements have been prepared
on
the historical cost basis, except for the measurement of certain
f inancial instruments (i.e. derivatives) as required by IFRS 9,
and on a going concern basis.
The Consolidated Financial Statements are presented
in thousand euros, which is the functional currency of the markets
where the Group mainly operates.
1.2.4 Directors’ assessment
on the assumption of business continuity
Based on the results of the current year and forecasts for future
years, the management believes that there are no factors
rendering business continuity uncertain. In particular, the Group's
f inancial strength and its cash and cash equivalents at the
end of the year guarantee a high level of f inancial independence
to support Moncler's operational needs and development
programmes. For 2025, business operations are fully guaranteed,
both in terms of product of ferings across the various markets
and distribution channels and in the ability to manage
and organise business activities.
1.2.5 Use of estimates and valuations
The preparation of the Consolidated Financial Statements
and the related explanatory notes in conformity with IFRS
requires that management makes estimates and assumptions
that af fect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities
at the reporting date The estimates and related assumptions
are based on historical experience and other relevant factors
The actual results could dif fer from those estimates
The estimates and underlying assumptions are reviewed
periodically
and any variation is ref lected in the consolidated
income
statement in the period in which the estimate is revised
if the revision af fects only that period or even in subsequent
periods
if the revision af fects both current and future periods
In the event that managements estimate and judgment
have a signif icant impact on the amounts recognised
1. General information about the Group
in the Consolidated Financial Statements or in case that
t
here is a risk of future adjustments on the amounts
recognised for assets and liabilities in the period immediately
after the reporting date, the following notes will include
the relevant information.
The estimates pertain mainly to the following captions
of the Consolidated Financial Statements:
•Impairment of non-current assets and goodwill;
•Impairment of trade receivables (bad debt provision);
•Allowance for returns;
•Impairment of inventories (obsolescence provision);
•Recoverability of deferred tax assets;
•Provision for losses and contingent liabilities;
•Lease liabilities and right of use assets;
•Incentive systems and variable remuneration;
•IAS 29 hyperinf lation;
•Fin
ancial liabilities for the purchase of minority interests;
•IFRIC 23: uncertainty over income tax treatments.
Impairment of non-current assets and goodwill
Non-current assets include property, plant and equipment,
intangible assets with indef inite useful life and goodwill,
investments and other f inancial assets.
Management periodically reviews non-current assets
for impairment if events or changes in circumstances indicate
that the carrying amount may not be recoverable. When
a review for impairment is conducted, the recoverable amount
is estimated based on the present value of future cash f lows
expected to derive from the asset or from the sale of the asset
itself, at a suitable discount rate.
When the recoverable amount of a non-current asset
is less than its carrying amount, an impairment loss is recognised
immediately in prof it or loss and the carrying amount is reduced
to its recoverable amount determined based on value-in-use
calculation or its sale’s value in an arm’s-length transaction, with
reference to the most recent Group business plan.
Impairment of trade receivables
The bad debt provision represents managements best estimate
of the probable loss for unrecoverable trade receivables
For the description of the criteria applied to estimate
the bad debt provision please refer to paragraph 210 Financial
instruments Trade receivables f inancial assets and other
current and noncurrent receivables
Allowance for returns
The allowance for returns ref lects managements best
estimate of the asset arising from expected product returns
and the associated liability for future refunds
Impairment of inventory
The Group manufactures and sells mainly clothing goods that
are subject to changing consumer needs and fashion trends.
As a result, it is necessary to consider the recoverability
of the cost of inventories and the related required provision.
Inventory impairment represents management’s best estimate
for losses arising from the sales of aged products, taking into
consideration their saleability through the Group’s
distribution channels.
Recoverability of deferred tax assets
The Group is subject to income taxes in numerous jurisdictions.
Judgment is required in determining the provision for income
taxes in each territory. The Group recognises deferred tax assets
when it is expected that they will be realised within a period
that is consistent with management estimates and business plans.
Provision for losses and contingent liabilities
The Group could be subject to legal and tax litigations arising
in the countries where it operates. Litigation is inevitably
subject to risk and uncertainties surrounding the events
and circumstances associated with the claims and associated with
local legislation and jurisdiction. In the normal course of business,
management requests advice from the Group legal consultants
and tax experts. The recognition of a provision is based
on management’s best estimate when an outf low of resources
is probable to settle the obligation and the amount can be reliably
estimated. In those circumstances where the outf low of resources
is possible or the amount of the obligation cannot be reliably
measured, the contingent liabilities are disclosed in the notes
to Consolidated Financial Statements.
Lease liabilities and right of use assets
According to IFRS 16 accounting standard, with reference to
multi-annual lease agreement, the Group recognises the asset
for the right of use and the liability for the lease. The asset
for the right of use is initially valued at cost or at the present value
of the rental costs provided by the contract and then subsequently
at cost net of accumulated depreciation and impairment losses and
adjusted to ref lect the revaluation of the lease liability
The Group values the lease liability at the present value of
the payments due for unpaid leases at the ef fective 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 economic environment in
which the contract was stipulated and the credit adjustment
The lease liability is subsequently increased by the interest
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