Moncler Group | Annual Report 2024 Separate Financial Statements 432 Moncler Group | Annual Report 2024 Separate Financial Statements 433
Trade payables and other current
and non-current payables
Trade and other payables arise when the Company acquires
money, goods or services directly from a supplier. They are
included in current liabilities, except for items with maturity
dates
greater than twelve months after the reporting date.
Pay
ables are stated, at initial recognition, at fair value, which
usually comprises the cost of the transaction, inclusive of
transaction costs. Subsequently, they are stated at amortised
cost using the ef fective interest method.
Financial liabilities
The classif ication of f inancial liabilities has not changed since
the introduction of IFRS 9. Amounts due to banks and
other lenders are initially recognised at fair value, net of directly
attributable incidental costs, and are subsequently measured
at
amortised cost, applying the ef fective interest rate method.
I
f there is a change in the expected cash f lows, the value
of the liabilities is recalculated to ref lect this change on the basis
o
f the present value of the new expected cash f lows and
the internal rate of return initially determined. Amounts due
to banks and other lenders are classif ied as current liabilities,
u
nless the Company has an unconditional right to defer their
payment for at least 12 months after the reference date. Loans are
classif ied as non-current when the company has an unconditional
right to defer payments for at least twelve months from
the reporting date.
Derivative instruments
Consistent with the provisions of IFRS 9, derivative f inancial
instruments may be accounted for using hedge accounting
only when:
•the hedged items and the hedging instruments meet
the eligibility requirements;
•at the beginning of the hedging relationship, there
is a formal designation and documentation of the hedging
relationship of the Companys risk management objectives
and the hedging strategy
the hedging relationship meets all of the following
ef fectiveness requirements i there is an economic
relationship between the hedged item and the hedging
instrument ii the ef fect of credit risk is not dominant
with respect to the changes associated with the hedged
risk iii the hedge ratio def ined in the hedging relationship
is met including through rebalancing actions and is
consistent with the risk management strategy adopted
by the Company
Fair value hedge
A derivative instrument is designated as fair value hedge when
it hedges the exposure to changes in fair value of a recognised asset
or liability, that is attributable to a particular risk and could
af fect prof it or loss. The gain or loss on the hedged item, attributable
t
o the hedged risk, adjusts the carrying amount of the hedged
i
tem
and is recognised in the consolidated income statement.
Cash f low hedge
When a derivative f inancial instrument is designated as a hedging
instrument for exposure to variability in cash f lows, the ef fective
portion of changes in fair value of the derivative f inancial
instrument is recognised among the other components
of the comprehensive income statement and stated in the cash
f low hedge reserve. The ef fective portion of changes in fair value
of the derivative f inancial instrument that is recognised
in the other components of the comprehensive income statement
is limited to the cumulative change in the fair value of the hedged
instrument (at present value) since the inception of the hedge.
The inef fective portion of changes in fair value of the derivative
f inancial instrument is recognised immediately in the prof it/(loss)
for the period.
If the hedge ceases to meet the eligibility criteria or the hedging
instrument is sold, matures or is exercised, hedge accounting
ceases prospectively. When hedge accounting for cash f low hedges
ceases, the accrued amount in the cash f low hedge reserve
remains in equity until, in the case of a hedge of a transaction that
results in the recognition of a non-f inancial asset or non-f inancial
liability, it is included in the cost of the non-f inancial asset or non-
f inancial liability on initial recognition or, in the case of other
cash f low hedges, it is reclassif ied in prof it or loss for the period
in the same period or periods in which the hedged expected future
cash f lows af fects prof it/(loss) for the period.
If no more hedged future cash f lows are expected, the amount
shall be reclassif ied immediately from the cash f low hedge reserve
and the reserve for hedging costs to prof it/(loss) for the period.
If hedge accounting cannot be applied gains or losses
arising from the fair value measurement of a derivative f inancial
instrument are immediately recognised in income statement
28 Employee benef its
Shortterm employee benef its such as wages salaries social
security contributions paid leave and annual leave due within
twelve months of the statement of f inancial position date
and all other fringe benef its are recognised in the year in which
the service is rendered by the employee
Ben
ef its granted to employees which are payable on or after
t
he termination of employment through def ined benef it
and contribution plans are recognised over the vesting period
Def ined benef it schemes
Def ined benef it schemes are retirement plans determined
based on employees’ remuneration and years of service.
The Company’s obligation to contribute to employees’ benef it
plans and the related current service cost is determined
by using an actuarial valuation def ined as the projected unit
credit method. The cumulative net amount of all
actuarial gains and losses are recognised in equity within
other comprehensive income.
With reference to def ined benef it plans, the increase
in present value of the def ined benef it obligation for employee
service in prior periods (past service cost) is accounted
as an expense on a straight-line basis over the average period
until the benef its become vested.
The amount recognised as a liability under the def ined
benef it plans is the present value of the related obligation,
taking into consideration expenses to be recognised in future
periods for employee service in prior periods.
Def ined contribution schemes
Contribution made to a def ined contribution plan is recognised
as an expense in the income statement in the period in which
the employees render the related service.
Up to 31 December 2006 Italian employees were eligible
to def ined benef it schemes referred as post-employment
benef it (“TFR”). With the act n. 296 as of 27 December 2006
and subsequent decrees (“Pension Reform”) issued in early
2007, the rules and the treatment of TFR scheme were changed.
Starting from contribution vested on or after 1 January 2007
and not yet paid at the reporting date, referring to entities with
more t
han 50 employees, Italian post-employment benef its
is recognised as a def ined contribution plan. The contribution
vested up to 31 December 2006 is still recognised as a def ined
benef it plan and accounted for using actuarial assumptions.
2.9 Share-based payments
The fair value at grant date of the incentives granted to employees
in the form of sharebased payments that are equity settled
is usually included in expenses with a matching increase in equity
over
the period during which the employees obtain the incentives
rights The amount recognised as an expense is adjusted to ref lect
the actual number of incentives for which the continued service
conditions are met and the achievement of nonmarket conditions
so that the f inal amount recognised as an expense is based
on the number of incentives that fulf ill these conditions
at the vesting date In case the incentives granted as sharebased
payments whose conditions are not to be considered to maturity
the fair value at the grant date of the sharebased payment
i
s measured to ref lect such conditions With reference to the
nonvesting conditions any dif ferences between amounts
at the grant date and the actual amounts will not have any impact
on the f inancial statements.
The fair value of the amount payable to employees related
to share appreciation rights, settled in cash, is recognised
as an expense with a corresponding increase in liabilities over
the period during which the employees unconditionally
become entitled to receive the payment. The liability is measured
at year-end and the settlement date based on the fair value
of the share appreciation rights. Any changes in the fair value
of the liability are recognised in prof it or loss for the year.
2.10 Provisions for risks and charges
Provisions for risks and charges are recognised when the
Company has a present legal or constructive obligation as a result
of p
ast events, for which it is probable that an outf low
of resour
ces will be required to settle the obligation and where
the amount of the obligation can be reliably estimated.
Changes in estimates are recognised in the income statement
in the period in which they occur.
2.11 Revenue recognition
Based on the f ive-step model introduced by IFRS 15, the Group
recognises revenues after identifying the contracts with its
clients and the related services to be provided (transfer of goods
and/or services), determining the consideration which it believes
it is entitled to in exchange for the provision of each of these
services and assessing the manner in which these services are
provided (at a given time or over time). Variable components
of the consideration are recognised in the f inancial statements
only when it is highly probable that there will be no signif icant
adjustment to the amount of revenue recognised in the future.
Royalties received from licensee are accrued as earned
on the basis of the terms of the relevant royalty agreement which
is typically based on sales volumes.
2.12 Borrowing costs
Borrowing costs are recognised on an accrual basis taking
into consideration interest accrued on the net carrying amount
of f inancial assets and liabilities using the ef fective interest
rate method
213 Taxation
Tax expense recognised in the consolidated income
statement represents the aggregate amount related to current
tax and deferred tax
C
urrent tax is determined in accordance with enforced rules
established by local tax authorities Current taxes are recognised
in the consolidated income statement for the period except
to the extent that the tax arises from transactions or events