Moncler Group | Annual Report 2024 Consolidated Financial Statements 354 |
that ref lects market time value of money and the risks inherent
to the asset. An impairment loss is recognised for the amount
by which the carrying amount exceeds its recoverable amount.
With the exception of impairment losses recognised
on goodwill, when the circumstances that led to the loss
no longer exist, the carrying amount of the asset is increased
to its recoverable amount and cannot exceed the carrying
amount that would have been determined had there been
no loss in value. The reversal of an impairment loss is recognised
immediately in the consolidated income statement.
For impairment testing purposes, the goodwill and brand
of Moncler and Stone Island are measured with respect
to the
group of CGUs that compose the entire business.
As of 2019, IFRS 16 requires the recognition of a right
of
use asset and a liability for the obligation to pay rent in
the f inancial statements. Any impairment of the asset for the right
of use must be calculated and recognised in accordance with
the provisions of IAS 36.
For the purpose of the rights-of-use impairment test related
to Moncler and Stone Island business, the following CGUs
have been def ined, which coincide with the organisational units
responsible for monitoring individual markets (“Regions”):
•EMEA Region;
•Americas Region;
•APAC Region;
•Mainland China Region;
•Japan Region;
•Korea Region.
The “rights-of-use” of each individual CGU is subject to
impairment tests in the presence of triggering events
(for the individual CGU) identif ied by a possible impairment
and signalled by the following key performance indicators:
•divestment plans;
•below expectation performance indicators;
•operational losses.
The impairment test is carried out with the following methods
calculation of the CGUs gross value in use excluding
that related to the lease liability from cash f lows
calculation of the CGUs recoverable amount
by deducting the carrying value of the lease liability
from the gross value in use
comparison of the CGUs recoverable value
with the carrying value the latter calculated net
of the carrying value of the lease liability
In calculating the value in use the discount rate used is the
WACC for the geographical area to which it belongs
the aggregate value of which determines the Group WACC
2.8 Leased assets
On 13 January 2016, the IASB published the new standard IFRS
16 Leases, which replaces IAS 17. This standard was endorsed
by the European Union, with its publication on 9 November
2017. IFRS 16 is ef fective for f inancial statements commencing
on or after 1 January 2019. The new standard eliminates
the dif ference in the recognition of operating and f inance leases,
even despite elements that simplify its adoption, and introduces
the concept of control in the def inition of a lease. To determine
whether a contract is a lease, IFRS 16 establishes that the contract
must convey the right to control the use of an identif ied asset
for a given period of time.
At the lease commencement date, the Group recognises
the right of use asset and lease liability. The right of use asset
is initially valued at cost, including the amount of the initial
measurement of the lease liability, adjusted for the rent
payments made on or before the commencement date, increased by
the initial direct costs incurred and an estimate of costs
to be incurred by the lessee in dismantling and removing
the underlying asset, restoring the site on which it is located or
restoring the underlying asset to the condition required
by the terms and conditions of the lease, net of the received
lease incentives.
The right of use asset is amortised on a straight-line basis
from the commencement date to the end of the lease term, unless
the lease transfers ownership of the underlying asset to the Group
at the end of the lease term. In this case, the right of use asset
will be amortised over the useful life of the underlying asset,
determined on the same basis as that of property and machinery.
In addition, the right of use asset is regularly decreased
for any impairment losses and adjusted to ref lect any changes
deriving from subsequent remeasurement of the lease liability.
The Group values the lease liability at the present value
of the payments due for unpaid leases at the commencement date,
discounting them using the interest rate implicit in the lease.
The payments due for the lease included in the measurement
of the lease liability include
f ixed payments including substantially f ixed payments
payments due for lease which depend on an index or rate
initially measured using an index or rate on the
commencement date
amounts that are expected to be paid as a residual value
guarantee and
the payments due for the lease in an optional renewal period
if the Group is reasonably certain to exercise the renewal
option and early termination cancellation penalties unless
the Group is reasonably certain not to terminate the lease
in advance
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