Annual Report 2007
Other disclosures
1/20 forward
Additional information on financial instruments
The table below shows the fair values and the carrying amounts of the financial assets and liabilities that are measured at cost or amortized cost.
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 such instruments.
The Company uses various parameters to measure non-current receivables, mainly interest rates and the customers' individual credit profile. 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, 2006 and 2007. The fair values of exchange-listed securities were based on their listed 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.
| € thousands | Dec. 31, 2007 | Dec. 31, 2006 | ||
| Fair value | Carrying amount | Fair value | Carrying amount | |
| Financial assets measured at cost or amortized cost | ||||
| Cash and cash equivalents | 81,294 | 81,294 | 184,774 | 184,774 |
| Trade receivables and other receivables | 197,294 | 197,294 | 161,901 | 161,901 |
| Other non-derivative financial assets | 8,120 | 8,101 | 1,483 | 1,462 |
| Financial liabilities measured at cost or amortized cost | ||||
| Liabilities to banks and other financial liabilities | 214,260 | 214,300 | 1,877 | 1,877 |
| Trade payables | 31,364 | 31,364 | 22,964 | 22,964 |
| Other non-derivative financial liabilities | 64,518 | 64,518 | 31,652 | 31,652 |
