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Software AG GB 2013. englisch

assets to be held to maturity are measured at amortized cost using the effective interest rate less any impairments. c) Loans and receivables Loans and receivables are financial assets with fixed or determinable payments not listed on an active market. On initial recognition, they are measured at fair value plus directly attributable transaction costs. Subsequently, they are measured at amortized cost using the effective interest rate less any impairments. Loans and receivables include cash and cash equivalents as well as trade receivables and other receivables. • 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. This item also includes services performed under fixed-price contracts that have not yet been invoiced and that are recognized in accordance with the ­percentage-of-completion method. Furthermore, it ­includes receivables from the sale of software ­licenses whereby the service has already been fully rendered but not yet invoiced. the employees acquire an unconditional right to the cash settlement or equity instrument. Rights granted under cash-settled share-based payment transactions are re­ measured 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 model or binomial model). Non-derivative financial assets Software AG recognizes financial assets as of the date it acquires the contractual right to receive cash or other finan- cial assets from another entity. Standard purchases and sales are measured at fair value as of the value date. Financial assets are measured at fair value on initial recognition. ­Financial assets that are not measured at fair value through profit or loss are measured at fair value plus directly attribut­ able transaction costs. Interest-free or below-market-rate loans and receivables are initially recognized at the present value of the expected future cash flows. Subsequent measurement is carried out based on the rele- vant category of financial assets in accordance with IAS 39: a) Financial assets that are measured at fair value through profit or loss For Software AG, these include only the derivative ­financial assets being held for trading purposes, because Software AG does not designate any financial assets at fair value through profit or loss on initial recognition. Financial assets that are measured at fair value through profit or loss are measured at fair value, and the changes are recognized in profit or loss accordingly. b) Financial investments held to maturity If Software AG is able and intends to hold debt instru- ments until maturity, such financial assets are cate­ gorized as financial investments to be held until matu- rity. They are measured initially at fair value plus directly attributable transaction costs. Subsequently, financial Software AG | Annual Report 2013 144 Letter from the Management Board About Software AG Software AG ShareHighlights 2013

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