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Software AG GB 2013. englisch

of past experience, information derived from current ­operating results and management estimates of future ­developments. Revenue trends at country level, for instance, is one element of management estimates of future develop­ ments that is particularly prone to uncertainty. This approach is rated as level 3 of the valuation hierarchy in accordance with IFRS 13. The forecasts take into account historical values and esti- mates of future developments. Costs to sell are assumed to amount to 2 percent of the relevant fair value. The estimated future cash flows for the Enterprise Transac- tion System (ETS) segment were discounted using a post-tax weighted average cost of capital (WACC) of 8.6 percent (2012: 6.5 percent). The sustainable growth rate was ­assumed to be 0 percent (2012: 0 percent). A discount of 20 percent (2012: 20 percent) on the last year of detailed planning was used to determine sustainable cash flows. Even using a discount of 50 percent on the last year of ­detailed planning, the fair value less costs to sell would exceed the carrying amount. For the Business Process Excellence (BPE) segment we ­assumed a sustainable growth rate of 2 percent (2012: 1 percent) and a weighted average cost of capital (WACC) after tax of 8.7 percent (2012: 7.4 percent). However, given a sustainable growth rate of 0 percent and a 50-percent reduction in growth compared to the budget for the period of detailed planning, the fair value less costs to sell would still exceed the carrying amount. Amounts from 2012 for the ETS and BPE segments are only comparable to a limited extent because the composition of the segments changed slightly year on year. For further information on the changed segment reporting structure, please refer to Segment Reporting in Note 28. For the new Consulting segment we assumed a sustainable growth rate of 2 percent and a weighted average cost of capital (WACC) after tax of 7.1 percent. If a sustainable growth rate of 1 percent were used, the fair value less costs to sell would be approximately equal to the carrying amount. Disregarding the sustainable growth rate, the as- sumed ­margin improvement in the period of detailed plan- ning is a significant assumption. If the margin does not improve as assumed from a current 3.4 percent (with The brand names indicated above are not subject to amor- tization. Any changes in the carrying amounts result from currency translation effects. The carrying amounts of goodwill and of intangible assets with indefinite useful lives were allocated to the segments as follows: Last year’s amounts were adjusted to reflect the new seg- ment reporting structure. For further information on the changed segment reporting structure, please refer to Note 28, Segment Reporting. The segments represent the smallest cash-generating units in the Group. Goodwill as well as intangible assets with an indefinite ­useful life are tested for impairment at least once per year by comparing the carrying amount of the cash-generating unit to which the goodwill or the intangible asset is allocated with the recoverable amount. Testing for impairment ­involves regularly checking the recoverable amount with regard to fair value less costs to sell. Fair value less costs to sell is calculated using discounted cash flows based on strategic budgets calculated and ­approved by management, which are for a period of three (2012: four) years. The budgets are designed on the basis in € thousands Dec. 31, 2013 Dec. 31, 2012 Segment ETS 311,642 310,089 BPE 486,945 415,472 Consulting 30,586 30,811 Goodwill 829,173 756,372 ETS 0 0 BPE 35,063 35,861 Consulting 9,766 9,788 Intangible assets with indefinite useful lives 44,829 45,649 Software AG | Annual Report 2013 158 Letter from the Management Board About Software AG Software AG ShareHighlights 2013

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