BASF Report 2021 Consoli dated Financial Statements – Notes 248 The rise in current other receivables and assets, which represent Valuation allowances on receivables (financial instruments) 2021 financial instruments, was due to higher deposits on commodity Million € derivatives and increased receivables for other refunds. As of As of Reclassification Translation December 31, January 1, 2021 Additions Releases between stages effect 2021 Precious metal trading items primarily comprise physical items, Accounts receivable, trade 299 120 110 − 1 310 precious metal accounts as well as long positions in precious of which stage 2 42 52 47 – – 47 metals, which are largely hedged through forward sales or stage 3 257 68 63 – 1 263 derivatives. Other receivables 122 28 40 − 2 112 Expected losses of trade accounts receivable at BASF are of which stage 1 2 15 14 – 0 3 calculated primarily on the basis of internal or external customer stage 2 0 0 0 – 0 0 ratings and the associated probability of default. stage 3 120 13 26 – 2 109 Total 421 148 150 − 3 422 The following table presents the gross values and credit risks for trade accounts receivable measured at amortized cost as of December 31, 2021. At BASF, a comprehensive, global credit insurance program covers Additions included valuation allowances of €1 million due to a accounts receivable, trade. Under a global excess of loss policy, change in valuation parameters. Additions primarily included Accounts receivable, trade future bad debts are insured for essentially all BASF Group valuation allowances of loans to former and current Group Million € companies excluding joint ventures. The program has no impact on companies. Creditworthiness as the calculation of valuation allowances in accordance with IFRS 9. of December 31, Equivalence to No compensation claims were incurred in either 2021 or 2020. 2021 external ratinga Gross carrying amounts High/medium credit from AAA to BBB– 7,325 Payment terms are generally agreed upon individually with custom- rating Low credit rating from BB– to D 4,707 ers and, as a rule, are within 90 days. In 2021, valuation allowances of €120 million (2020: €142 million) were added for trade accounts a Standard & Poor’s rating receivable, and valuation allowances of €110 million (2020: €124 million) were reversed. There are currently no significant credit risks (or a concentration thereof) associated with other financial instruments. BASF generally In 2021, valuation allowances of €28 million were recognized for monitors the credit risk associated with counterparties with which other receivables representing financial instruments, and valuation receivables exist representing financial instruments. In accordance allowances of €40 million were reversed. In the previous year, with IFRS 9, impairments for expected credit losses on receivables valuation allowances of €98 million were recognized and valuation are recognized based on this. allowances of €13 million were reversed.