33.2. Credit and default risk

The credit and default risk arising from financial assets involves the risk of default by counterparties, and therefore comprises at a maximum the amount of the claims under carrying amounts receivable from them and the irrevocable credit commitments. The maximum potential credit and default risk is reduced by collateral held and other credit enhancements in the amount of €65,267 million (previous year: €59,237 million). The collateral held relates solely to financial assets carried at amortized cost and mainly serves to secure financial services receivables and trade receivables. Collateral comprises vehicles and assets transferred as security, as well as guarantees and real property liens. The risk arising from nonderivative financial instruments is also accounted for by recognizing bad debt losses. Significant cash and capital investments, as well as derivatives, are only entered into with prime-rated national and international counterparties. Risk is additionally limited by a limit system based primarily on credit assessments by the international rating agencies and on the equity base of the counterparties concerned.

There were no material concentrations of risk at individual counterparties or counterparty groups in the past fiscal year due to the global allocation of the Group’s business activities and the resulting diversification. By contrast, a significant portion of the Group-wide cash and capital investments, as well as derivatives, was attributable to the German public banking sector as a whole.

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CREDIT AND DEFAULT RISK RELATING TO FINANCIAL ASSETS BY GROSS CARRYING AMOUNT
€ million		Neither past due nor impaired		Past due and not impaired		Impaired		Dec. 31, 2012		Neither past due nor impaired		Past due and not impaired		Impaired		Dec. 31, 2011
Measured at amortized cost
Financial services receivables		83,104		2,767		3,333		89,204		73,332		2,356		2,825		78,513
Trade receivables		7,055		3,111		378		10,544		7,674		2,688		343		10,706
Other receivables		8,832		73		512		9,417		6,460		69		523		7,052
		98,991		5,951		4,223		109,165		87,467		5,113		3,691		96,271

There are no past due financial instruments measured at fair value in the Volkswagen Group. In fiscal year 2012, marketable securities measured at fair value with a cost of €85 million (previous year: €73 million) were individually impaired.

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CREDIT RATING OF THE GROSS CARRYING AMOUNTS OF FINANCIAL ASSETS THAT ARE NEITHER PAST DUE NOR IMPAIRED
€ million		Risk class 1		Risk class 2		Dec. 31, 2012		Risk class 1		Risk class 2		Dec. 31, 2011
Measured at amortized cost
Financial services receivables		67,630		15,475		83,104		62,252		11,080		73,332
Trade receivables		7,054		1		7,055		7,674		0		7,674
Other receivables		8,796		36		8,832		6,427		33		6,460
Measured at fair value		10,108		–		10,108		16,387		–		16,387
		93,587		15,512		109,099		92,740		11,114		103,854

The Volkswagen Group performs a credit assessment of borrowers in all loan and lease agreements, using scoring systems for the high-volume business and rating systems for corporate customers and receivables from dealer financing. Receivables rated as good are contained in risk class 1. Receivables from customers whose credit rating is not good but have not yet defaulted are contained in risk class 2.

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MATURITY ANALYSIS OF THE GROSS CARRYING AMOUNTS OF FINANCIAL ASSETS THAT ARE PAST DUE AND NOT IMPAIRED
		Past due by						Gross carrying amount
€ million		up to 30 days		30 to 90 days		more than 90 days		Dec. 31, 2011
Measured at amortized cost
Financial services receivables		1,743		591		22		2,356
Trade receivables		1,626		561		502		2,688
Other receivables		36		10		23		69
Measured at fair value		–		–		–		–
		3,404		1,162		546		5,113

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		Past due by						Gross carrying amount
€ million		up to 30 days		30 to 90 days		more than 90 days		Dec. 31, 2012
Measured at amortized cost
Financial services receivables		2,206		536		24		2,767
Trade receivables		1,677		868		566		3,111
Other receivables		37		7		29		73
Measured at fair value		–		–		–		–
		3,920		1,411		620		5,951

Collateral that was accepted for financial assets in the current fiscal year was recognized in the balance sheet in the amount of €129 million (previous year: €86 million). This mainly relates to vehicles.