Moncler Group | Annual Report 2024 Separate Financial Statements 430 Moncler Group | Annual Report 2024 Separate Financial Statements 431
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
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
•t
he payments due for the lease in an optional renewal period
if the Company is reasonably certain to exercise the renewa
l
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
a
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
fo
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
•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.
On initial recognition of a security not held for trading, the
C
ompany may make an irrevocable choice to present
subsequent changes in fair value in the other components
of the comprehensive income statement. This choice
is made for each asset.
At the time of subsequent measurement, the measurement
made at the time of recognition is updated and any changes
in fair value are recognised in the statement of comprehensive
income. As for the category above, these assets are subject to the
impairment model described in the paragraph Trade receivables,
f inancial assets and other current and non-current receivables.
All f inancial assets not classif ied as valued at amortised
cost or at FVOCI, as indicated above, are valued at FVTPL.
All derivative f inancial instruments are included.
On initial recognition, the Company may irrevocably
designate the f inancial asset as measured at fair value through
prof it/(loss) for the period if this eliminates or signif icantly
reduces a misalignment in accounting that would otherwise result
from measuring the f inancial asset at amortised cost or at FVOCI.
At the time of subsequent measurement, f inancial assets
measured at FVTPL are valued at fair value. Gains or losses
arising from changes in fair value are recognised in the
consolidated income statement in the period in which they are
recognised under f inancial income/expenses.
Financial assets are derecognised from the f inancial
statements when the contractual rights to receive cash f lows
from them expire, when the contractual rights to receive cash
f lows from a transaction in which all the risks and rewards
of ownership of the f inancial asset are materially transferred
or when the Company neither transfers nor retains materially
all the risks and rewards of ownership of the f inancial asset
and does not retain control of the f inancial asset
Financial liabilities are classif ied as valued at amortised cost
or at FVTPL A f inancial liability is classif ied at FVTPL when
it is held for trading it represents a derivative or is designated
as such on initial recognition Financial liabilities at FVTPL
are measured at fair value and any changes including interest
expense are recognised in prof it or loss for the period Other
f inancial liabilities are measured at amortised cost using
the ef fective interest method Interest expense and exchange
rate gainslosses are recognised in prof it or loss for the period
as are any gains or losses from derecognition
The Companys f inancial instruments consist primarily
of cash and cash equivalents accounts receivable accounts
payable, other current and non-current assets and liabilities,
investments, borrowings and derivative f inancial instruments.
Cash and cash equivalents
Cash and cash equivalents include cash and short-term deposits
held with banks and most liquid assets that are readily
convertible into cash and that have insignif icant risk of change
in value. Bank overdrafts are recorded under current liabilities on
the Company’s statement of f inancial position.
Trade receivables and other current
and non-current receivables
Trade and other receivables generated when the Company
provides money, goods or services directly to a third party are
classif ied as current assets, except for items with maturity dates
greater than twelve months after the reporting date.
Receivables are valued if they have a f ixed maturity,
at amortised cost calculated using the ef fective interest method.
When f inancial assets do not have a f ixed maturity, they are
valued at cost. Receivables with a maturity of over one year, which
are non-interest bearing or which accrue interest below market
rates, are discounted using market rates.
The f inancial assets listed above are valued based
on the impairment model introduced by IFRS 9 or by adopting
an expected loss model, replacing the IAS 39 framework, which
is typically based on the valuation of the incurred loss.
For trade receivables, the Company adopts the so-called
simplif ied approach, which does not require the recognition
of per
iodic changes in credit risk, but rather the accounting of
a
n Expected Credit Loss (“ECL") calculated over the entire life
of the credit (so-called lifetime ECL).
In particular, the policy implemented by the Company provides
for the stratif ication of trade receivables based on the days past
due and an assessment of the solvency of the counterparty and
a
pplies dif ferent write-down rates that ref lect the relative
ex
pectations of recovery. The Company then applies an analytical
v
aluation of impaired receivables based on a debtors reliability
and ability to pay the due amounts
The value of receivables is shown in the statement of f inancial
position net of the related bad debt provision Writedowns made
in accordance with IFRS 9 are recognised in the consolidated
income statement net of any positive ef fects associated with
reversals of impairment