Moncler - Annual Report 2024

Moncler Group | Annual Report 2024 Separate Financial Statements 430 |

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 Company values the lease liability at the present value

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

•t

he payments due for the lease in an optional renewal period

if the Company is reasonably certain to exercise the renewa

option, and early termination cancellation penalties, unless

the Company is reasonably certain not to terminate the lease

in advance.

The lease liability is measured at amortised cost using the ef fective

interest criterion and remeasured 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 Company expects to pay as a guarantee on the residual

value or when the Company changes its measurement with

reference to the exercise or otherwise of a purchase, extension

or cancellation option or in the event of revision of in-substance

f ixed payments due.

When the lease liability is remeasured, the lessee makes

a corresponding change in right of use asset. If the right

of use asset carrying value is reduced to zero, the lessee recognises

the change in prof it/(loss) for the year.

In the statement of f inancial position, the Company reports

right of use assets that do not meet the def inition of real estate

investments in the item Property plant and equipment and lease

liabilities in the item Borrowings

The Company recognises the related payments due for leases

as a cost on a straightline basis over the lease term

For contracts signed before 1 January 2019 the Company

established whether the agreement was or contained a lease

by checking if

fulf ilment of the agreement depended on the use

of one or more specif ic assets and

the agreement transferred the right to use the asset

Other assets subject to leases are classif ied as operating leases

and are not recognised in the Companys statement of f inancial

position Payments relating to operating leases are recognised

s a straight-line cost over the lease term, while incentives granted

to the lessee are recognised as an integral part of the overall

lease cost over the lease term.

2.7 Financial instruments

Trade receivables and debt securities issued are recognised when

they are originated. All other f inancial assets and liabilities

are initially recognised at the trade date, i.e., when the Company

becomes a contractual party to the f inancial instrument.

Except for trade receivables that do not comprise a signif icant

f inancing component, f inancial assets are initially measured

at fair value plus or minus, in the case of f inancial assets

or liabilities not measured at FVTPL, the transaction costs directly

attributable to the acquisition or issue of the f inancial asset.

At the time of initial recognition, trade receivables that

do not have a signif icant f inancing component are valued at their

transaction price.

On initial recognition, a f inancial asset is classif ied based

on its valuation: at amortised cost, at fair value through

other comprehensive income (FVOCI) and at fair value through

prof it/(loss) for the period (FVTPL).

Financial assets are not reclassif ied after initial recognition,

unless the Company changes its business model for managing

f inancial assets. In that case, all the f inancial assets concerned are

reclassif ied on the f irst day of the f irst reporting period following

the change in business model.

A f inancial asset shall be measured at amortised cost if both

of the following conditions are met and if it is not designated

at FVTPL:

•the f inancial asset is held as part of a business model whose

objective is to hold the f inancial assets in order to collect

the related contractual cash f lows; and

•the contractual terms of the f inancial asset provide for cash

f lows at certain dates consisting solely of payments

of principal and interest on the amount of principal

to be repaid.

At the time of subsequent measurement assets belonging

to this category are valued at amortised cost using the ef fective

interest rate The ef fects of measurement are recognised

among the f inancial income components These assets are also

subject to the impairment model described in the paragraph Trade

receivables f inancial assets and other current and

noncurrent receivables

A f inancial asset shall be measured at FVOCI if both of the

llowing conditions are met and if it is not designated at FVTPL

the f inancial asset is held as part of a business model whose

objective is achieved both through the collection

of the contractual cash f lows and through the sale of the

f inancial assets and

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