Moncler Group | Annual Report 2024 Consolidated Financial Statements 352 Moncler Group | Annual Report 2024 Consolidated Financial Statements 353

2.3 Business combinations

Business combinations are accounted under the acquisition method.

Under this method, the identif iable assets acquired

and

the liabilities assumed are measured initially

at their

acquisition-date fair values. The costs incurred

in a business

combination are accounted as expenses in the periods in

which the services are rendered.

Goodwill is determined as the excess of the aggregate

of the considerations transferred, of any non-controlling

interests and, in a business combination achieved in stages,

the fair value of previously held equity interest in the

acquiree compared to the net amounts of fair value of assets

transferred and liabilities assumed at the acquisition date.

If the fair value of the net assets acquired is greater than

the acquisition cost, the dif ference is recognised directly in

the statement of income at the acquisition date. Non-controlling

interests could be measured either at their fair value at the

acquisition date or at the non-controlling interests’ proportionate

share of the identif iable net assets. The election of either method

is done for each single business combination.

If the initial accounting for a business combination is

incomplete by the end of the reporting period in which

the combination occurred, the Group shall report in the f inancial

statements provisional amounts for the items for which

the accounting is incomplete. During the measurement period,

that shall not exceed one year from the acquisition date,

the provisional amounts are retrospectively adjusted to ref lect

new information obtained about facts and circumstances that

existed at the acquisition date and, if known, would have af fected

the measurement of assets and liabilities recognised at that date.

2.4 Non-current assets available

for sale and discontinued operations

Non-current assets available for sale and discontinued

operations are classif ied 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 transaction instead of continued use

Discontinued operations are operations that

include a separate line of business or a dif ferent

geographical area

are part of a single coordinated plan for the disposal

of a separate major line of business or geographical

area of activity

consist of subsidiaries acquired exclusively for the purpose

of being sold

In the consolidated income statement, non-current assets

held for sale and disposal groups that meet the requirements

of IFRS 5 to be def ined as “discontinued operations", are

presented in a single caption that includes both gains and losses,

as well as losses or gains on disposal and the related tax ef fect.

The comparative period is subsequently restated in accordance

with IFRS 5.

As far as the f inancial position is concerned, non-current

assets held for sale and disposal groups that meet the

requirements of IFRS 5 are reclassif ied as current assets

and liabilities in the period in which such requirements

arise. The comparative f inancial statements are not restated

or reclassif ied.

2.5 Property, plant and equipment

Property, plant and equipment are stated at acquisition or

manufacturing cost, not revalued net of accumulated depreciation

and impairment losses (“impairment"). Cost includes original

purchase price and all costs directly attributable to bringing

the asset to its working condition for its intended use.

Depreciation

Depreciation of property, plant and equipment is calculated

and recognised in the consolidated income statement

on a straight-line basis over the estimated useful lives as reported

in the following table:

Leased assets are depreciated over the shorter of the lease term

and their useful lives unless it is reasonably certain that the Group

will take ownership of the asset by the end of the lease term

Depreciation period is reviewed at each reporting period

and adjusted if appropriate

CATEGORY DEPRECIATION PERIOD

Land No depreciation

Buildings From 10 to 33 years

Plant and equipment From 6 to 12 years

Fixtures and f ittings From 5 to 10 years

Electronic machinery and equipment From 3 to 5 years

Leasehold improvements Useful life of improvements

Rights of use Lease period

Other f ixed assets Depending on market conditions

generally within the expected utility

to the entity

Gain/losses on the disposal of property, plant and equipment

Gains and losses on the disposal of property, plant and equipment

represent the dif ference between the net proceeds and net

book value at the date of sale. Disposals are accounted when

the relevant transaction becomes unconditional.

2.6 Intangible assets

Goodwill

Goodwill arising from business combination is initially recognised

at the acquisition date as described in the notes related

to “Business combinations”.

Goodwill is included within intangible assets with an

indef inite useful life, and therefore, is not amortised but subject

to impairment test performed annually or more frequently

if events or changes in circumstances indicate that

the carrying value may not be recoverable. After the initial

recognition, goodwill is measured at acquisition cost less

accumulated impairment.

A

s part of the IFRS f irst time adoption, the Group chose

not to apply IFRS 3 “Business combinations” retrospectively

regarding acquisitions made prior to the transition date

(1 January 2009); consequently, goodwill resulting from

acquisitions prior to the transition date to IFRS is still recorded

under Italian GAAP, prior to any eventual impairment.

For further details please refer to note 2.7 “Impairment

of non-f inancial assets".

Brands

Separately acquired brands are shown at historical cost. Brands

acquired in a business combination are recognised at fair value

at the acquisition date.

Brands have an indef inite useful life and are carried

at cost less accumulated impairment. Brands are not amortised

but subject to impairment test performed annually or more

frequently if events or changes in circumstances indicate that

the carrying value may not be recoverable

For further details please refer to note 27 Impairment

of nonf inancial assets

Intangible assets other than goodwill and brands

License rights are capitalised as intangible asset and amortised

on a straightline basis over their useful economic life The useful

economic life of license rights is determined on a casebycase

basis in accordance with the terms of the underlying agreement

Key money are capitalised in connection with the opening

of new directly operated store DOS based on the amount paid

Key money in general have a def inite useful life which

is generally in line with the lease period However in certain

circumstances key money have an indef inite useful life on the basis

of legal protection or common practice that can be found in

jurisdictions or markets that state that a refund could be received

at the end of the lease period. In these limited cases, that

need to be adequately supported, key money are not amortised

but subject to impairment test at least annually in accordance

with what set out in the note related to impairment of

non-f inancial assets.

Software (including licenses and separately identif iable

external development costs) is capitalised as intangible assets

at purchase price, plus any directly attributable cost of preparing

that asset for its intended use. Software and other intangible

assets that are acquired by the Group and have def inite useful

lives are measured at cost less accumulated amortisation

and accumulated impairment losses.

Amortisation of intangible assets with a def inite useful life

Intangible assets with a def inite useful life are amortised on

a straight line basis over their estimated useful lives as described

in the following table:

2.7 Impairment of non-f inancial assets

At least once a year the Group verif ies whether there

is any indication that intangible assets with a def inite useful

life and property, plant and equipment have become impaired.

If such evidence exists, the carrying amount of the assets

is reduced to its recoverable amount

Goodwill and assets with an indef inite useful life are

not subject to amortisation and are tested annually or more

frequently for impairment whenever events or changes

in circumstance indicate that the carrying amount may not

be recoverable

When the recoverable amount for individual asset cannot

be reliably estimated the Group determines the recoverable

amount of the cashgenerating unit to which the asset belongs

The recoverable amount is the higher of an assets fair value

less costs to sell and valueinuse The Group determines

the value in use as the present value of future cash f lows expected

to be derived from the asset or from the cashgenerating unit

gross of tax ef fects by applying an appropriate discount rate

CATEGORY DEPRECIATION PERIOD

License rights Based on market conditions

within the licence period or legal

limits to use the asset

Key money Based on market conditions

generally within the lease period

Software From 3 to 5 years

Order backlog Based on fulf illment of the order

backlog identif ied in PPA

Other intangible assets Based on market conditions

generally within the period of control

over the asset