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Software AG GB 2012, englisch

SOFTWARE AG | ANNUAL REPORT 2012 174 General and administrative expenses General and administrative expenses include costs for personnel, materials and depreciation allocated to the administration cost center. Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the asset. Other borrowing costs are recognized as an expense for the period in which they were incurred. Share-based payment In accordance with IFRS 2, share-based payment transactions are divided into cash-settled and equity- settled transactions. Both types of payment transactions are measured at their fair value as of the grant date and then amortized as personnel expenses over the period in which the employees acquire an uncon- ditional right to the cash settlement or equity instrument. Rights granted under cash-settled payment transactions are remeasured at fair value on each reporting date until settlement. If Software AG has a choice of settling either in cash or by providing equity instruments (shares), the right granted is accounted for as an equity-settled transaction, unless there is a present obligation to settle in cash. The fair values are determined using an appropriate option pricing model (Black-Scholes or binomial model). Cash and cash equivalents Cash and cash equivalents include cash on hand, bank balances and term deposits with maturities of up to three months as well as short-term, highly liquid securities classified as current assets that are readily convertible to known amounts of cash and are only subject to negligible risk of changes in value. Trade receivables The carrying amount of trade receivables corresponds to their respective invoiced amount, less sales deduc- tions and valuation allowances. If there is objective evidence that the receivables may be impaired, we recognize specific valuation allowances. In addition, certain classes of receivables are subject to portfolio- based valuation allowances based on past experience, taking into account the age of receivables. Non- interest bearing receivables with maturities of more than one year are discounted using an adequate interest rate.