LensCrafters 2015 Annual Report Download - page 186

Notes to the separate financial statements as of December 31, 2015 Page 6 of 77
When an impairment loss is no longer justified, the carrying amount of the asset is increased to its new estimated
recoverable amount, which may not exceed original cost. The reversal of an impairment loss is recognized immediately
in the statement of income.
Share-based payments. The Company awards share-based benefits in the form of stock options or incentive stock
options to employees as well as directors who habitually provide their services to one or more subsidiaries.
The Company applies IFRS 2 - Share-Based Payment to account for stock options; this requires goods or services
acquired in an equity-settled share-based payment transaction to be measured at the fair value of the goods or services
received or at the grant date fair value of the equity instruments granted. This methodology falls into Level 1 of the fair
value hierarchy identified by IFRS 7.
This value is recognized in profit or loss on a straight-line basis over the vesting period, with a matching increase
recorded in equity; the amount recognized is estimated by management, taking account of any vesting conditions. The
fair value of stock options is determined using the binomial model.
Under IFRS 2 - Share-Based Payment, the total grant date fair value of stock options granted to employees of
subsidiaries must be recognized in the statement of financial position, as an increase in the value of investments in
subsidiaries, with the matching entry going directly to equity. When employees of a subsidiary exercise their
options/shares, Luxottica Group S.p.A. will recharge the related cost to the subsidiary, recognizing a receivable in its
regard while reducing the value of the related investment in the subsidiary. If the recharge is higher than the increase
originally recognized in the value of the investment, the difference is treated as a gain through the statement of income.
Dividends. Dividend income is recognized when the investor's right to receive payment is established, following the
declaration of a dividend by the investee's stockholders in general meeting.
Dividends payable by the Company are recognized as changes in stockholders' equity in the period in which they are
approved by the stockholders in general meeting.
Derivative financial instruments. Derivative instruments are initially recognized at fair value through profit or loss.
Financial derivatives that do not qualify for hedge accounting are subsequently measured at fair value through profit or
loss.