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Software AG GB 2013. englisch

NotestotheConsolidatedFinancialStatements The fair values of cash and cash equivalents, time deposits, current receivables, trade payables and other current ­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, 2013 and December 31, 2012. 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. The net gain/loss from loans and receivables was only ­affected significantly by currency translation effects. The net loss from derivatives without qualifying hedging relation- ships amounted to €3,806 thousand (2012: €3,101 thou- sand) in fiscal 2013. The net loss from derivatives designated as cash flow hedges was included in the income statement and amounted to €2,267 thousand in 2013 (2012: €1,345 thousand). Market risk and the use of derivative financial instruments As a result of its international operating activities as well as its investing and financing activities, Software AG is exposed to various financial risks. Management continuously monitors these risks. Derivative financial instruments are used in ­accordance with internal guidelines in order to reduce risks arising from changes in interest rates, exchange rates, cash flows, or the value of cash investments. Derivatives are generally entered into to hedge existing balance sheet ­exposures and highly probable forecast transactions. a) Interest rate risk The Company is subject to interest rate fluctuations that affect both assets and equity and liabilities on the balance sheet. On the assets side, income from investing cash and cash equivalents and future interest income resulting from ­discounting non-current receivables are particularly subject to interest rate risk. On the equity and liabilities side, interest expenses for current and non-current financial liabilities as well as pension provisions and other items related to long- term borrowings are especially exposed to interest rate risk. The sensitivity analysis required by IFRS 7 relates to interest rate risk arising from monetary financial instruments bearing variable interest rates. Based on the current structure of the interest-bearing finan- cial instruments, a hypothetical increase in the market ­interest level of 100 basis points would raise earnings by €2,332 thousand (2012: €2,388 thousand). b) Exchange rate risk In order to hedge the risk of future fluctuations in exchange rates, the Company enters into currency forward contracts. Foreign currency receivables and liabilities are offset if ­possible, and only the remaining net exposure is hedged. Estimated cash flows are also hedged in accordance with internal guidelines. Hedging transactions are measured at their fair value. The amounts are reported in the balance sheet under other ­assets or current liabilities. Changes in the fair value of ­derivative financial instruments designated as cash flow hedges are reported under other reserves until the hedged item is required to be recognized in income. The ineffective portions of cash flow hedges as well as changes in the value of hedging instruments that do not meet the requirements of hedge accounting are recognized immediately in profit or loss for the year in which they are incurred. 185 Corporate Governance Report of the Supervisory Board Group Management Report Consolidated Financial Statements Additional Information Notes General Notes to the Consolidated Income Statement Notes to the Consolidated Balance Sheet Other Disclosures Responsibility Statement Auditors’ Report

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