CURRENT FINANCIAL ASSETS AND OTHER FINANCIAL LIABILITIES

12 Months Ended

Dec. 31, 2023

CURRENT FINANCIAL ASSETS AND OTHER FINANCIAL LIABILITIES

19. CURRENT FINANCIAL ASSETS AND OTHER FINANCIAL LIABILITIES

Current financial assets are as follows:


	At December 31,
	2023	2022
	(€ thousand)
Financial derivatives	55,562	80,233
Other financial assets	5,568	7,068
Current financial assets	61,130	87,301

Current financial assets and other financial liabilities mainly relate to foreign exchange derivatives and interest rate caps.

The following table sets forth a breakdown of derivative assets and liabilities at December 31, 2023 and 2022.


	At December 31,
	2023		2022
	Positive fair value	Negative fair value	Positive fair value	Negative fair value
	(€ thousand)
Cash flow hedge:
Currency swaps	34,542	(10,170)	41,270	(16,976)
Interest rate caps	17,407	—	36,771	—
Commodities	—	(174)	5	(772)
Total Cash flow hedges	51,949	(10,344)	78,046	(17,748)
Other foreign exchange derivatives	3,613	(3,195)	2,187	(2,245)
Current financial assets/(liabilities)	55,562	(13,539)	80,233	(19,993)

Foreign currency derivatives that do not meet the requirements to be recognized as cash flow hedges are presented as other foreign currency derivatives. Interest rate caps relate to derivative instruments required as part of certain securitization agreements.

The following tables provide an analysis of outstanding derivative financial instruments by foreign currency based on their fair value and notional amounts:


	At December 31, 2023		At December 31, 2022
	Fair Value	Notional Amount	Fair Value	Notional Amount
	(€ thousand)
Currencies:
U.S. Dollar	32,069	2,515,057	49,466	2,385,494
Pound Sterling	(678)	145,216	2,811	121,881
Japanese Yen	14,086	392,343	2,711	275,700
Swiss Franc	(3,660)	106,911	(991)	108,459
Chinese Yuan	915	141,493	2,702	176,062
Other(1)	(709)	153,207	3,541	131,319
Total amount	42,023	3,454,227	60,240	3,198,915

______________________________

(1) Other mainly includes the Australian Dollar, the Canadian Dollar and the Hong Kong Dollar.

At December 31, 2023 and 2022, substantially all derivative financial instruments had a maturity of twelve months or less.

Cash flow hedges

The effects recognized in the consolidated income statement mainly relate to currency risk management and in particular the exposure to fluctuations in the Euro/U.S. Dollar exchange rate for sales in U.S. Dollars.

The policy of the Group for managing foreign currency risk normally requires hedging of a portion of projected future cash flows from trading activities and orders acquired (or contracts in progress) in foreign currencies that will occur within the following 12 months. Derivatives relating to foreign currency risk management are treated as cash flow hedges where the derivative qualifies for hedge accounting. The amounts recorded in the cash flow hedge reserve within other comprehensive income will be recognized in the consolidated income statement according to the timing of the flows of the underlying transactions. Management believes that substantially all of the hedging effects arising from these derivative contracts and recorded in the cash flow hedge reserve will be recognized in the consolidated income statement within the following 12 months from the reporting date.

The Group reclassified gains and losses, net of the related tax effects, from other comprehensive income/(loss) to the consolidated income statement as follows:


	For the years ended December 31,
	2023	2022	2021
	(€ thousand)
Net revenues/(costs)	48,393	(75,749)	7,275
Income tax (expense)/benefit	(13,502)	21,134	(2,030)
Total recognized in the consolidated income statement	34,891	(54,615)	5,245

The ineffectiveness of cash flow hedges was not material for the years 2023, 2022 and 2021.