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Software AG GB 2012, englisch

SOFTWARE AG | ANNUAL REPORT 2012 218 [29] Additional information on financial instruments and risk management The table below shows the carrying amounts and the fair values of loans and receivables, financial liabilities measured at amortized cost, and derivatives, with derivatives that are part of a hedging relationship shown separately from those that are not part of a hedging relationship. The fair values of cash and cash equivalents, current receivables, trade payables, other current financial liabilities, and other financial liabilities correspond approximately with their carrying amounts, primarily due to the short terms of these instruments. The Company uses various parameters to measure non-current receivables, mainly interest rates and the customers’ individual credit ratings. Software AG calculates bad debt allowances to reflect expected defaults based on the measurement results. Accordingly, the carrying amounts of these receivables corresponded approximately with their fair values as of December 31, 2012 and December 31, 2011. The fair values of exchange-listed securities were based on their quoted prices as of the reporting date. Software AG calculates the fair values of liabilities to banks and other financial liabilities as well as other non-current financial liabilities by discounting the estimated future cash flows using the interest rates applicable to similar financial liabilities with comparable maturities.