18 – Receivables and miscellaneous assets

The increase in noncurrent loans and interest receivables was predominantly due to the loan in the amount of €325 million granted by Wintershall Nederland Transport and Trading B.V., Rijswijk, Netherlands, to Nord Stream 2 AG, and the loan in the amount of €140 million granted by W & G Transport Holding GmbH, Kassel, Germany, to W & G Infrastruktur Finanzierungs-GmbH, Kassel, Germany, in 2017. In 2017, the loans granted by the fully consolidated WIGA Transport Beteiligungs-GmbH & Co. KG, Kassel, Germany, to NEL Gastransport GmbH, Kassel, Germany, and GASCADE Gastransport GmbH, Kassel, Germany were transferred to the W & G Infrastruktur Finanzierungs-GmbH, which is accounted for using the equity method, and had an offsetting effect of €259 million. In addition to the loans granted already mentioned, there were particularly loans and interest receivables from BASF Belgium Coordination Center Comm. V. Antwerp, Belgium, to finance the business expansion of Asian companies, and receivables in favor of BASF SE from the BASF Pensionskasse VVaG.

The reduction of noncurrent derivatives with positive fair values primarily affected the market valuation of combined interest rate and currency swaps. The change in current derivatives with positive fair market values was largely attributable to the lower fair values of precious metal and foreign currency derivatives.

Prepaid expenses in 2017 included prepayments of €62 million related to operating activities compared with €64 million in 2016, as well as €50 million in prepayments for insurance in 2017 compared with €54 million in 2016. Prepayments for license costs decreased from €48 million in 2016 to €42 million in 2017.

The increase in current tax refund claims can largely be traced back to the rise in open income tax receivables.

Precious metal trading items primarily comprise physical items and precious metal accounts as well as long positions in precious metals, which are largely hedged through sales or derivatives.

Changes recognized in income contained individual valuation allowances, group-wise individual valuation allowances and valuation allowances due to transfer risks.

Changes not recognized in income were primarily related to changes in the scope of consolidation, translation adjustments and derecognition of uncollectible receivables.

In the current economic environment, BASF has not observed any material changes in the credit quality of its receivables. In 2017, individual valuation allowances of €61 million were recognized for accounts receivable, trade, and €15 million were reversed. In 2016, individual valuation allowances of €71 million were recognized for trade accounts receivable and valuation allowances of €22 million were reversed.

At BASF, a comprehensive, global credit insurance program covers trade accounts receivable. As part of a global excess of loss policy, future bad debts are insured for essentially all BASF Group companies excluding joint ventures. No compensation claims were incurred in either 2016 or 2017.

In 2017, individual valuation allowances of €10 million were recognized for other receivables and €6 million were reversed. In 2016, individual valuation allowances of €27 million were recognized for other receivables and €1 million was reversed.

As of December 31, 2017, there were no material other receivables classified as financial instruments that were overdue and for which no valuation allowance was made.