Notes to the financial statements of Aegon N.V.  Note 2 294 The fair value of an asset is the amount for which it could be exchanged between knowledgeable, willing parties in an arm’s length  transaction. For quoted financial assets for which there is an active market, the fair value is the bid price at the balance sheet date. In the  absence of an active market, fair value is estimated by using present value based or other valuation techniques. Where discounting  techniques are applied, the discount rate is based on current market rates applicable to financial instruments with similar characteristics.  The valuation techniques that include non-market observable inputs can result in a different outcome than the actual transaction price at  which the asset was acquired. Such differences are not recognized in the income statement immediately but are deferred. They are  released over time to the income statement in line with the change in factors (including time) that market participants would consider in  setting a price for the asset. Interest accrued to date is not included in the fair value of the financial asset. Financial assets that are lent to a third party or that are transferred subject to a repurchase agreement at a fixed price are not  derecognized as the Group retains substantially all the risks and rewards of the asset. A liability is recognized for cash collateral  received, on which interest is accrued.  A security that has been received under a borrowing or reverse repurchase agreement is not recognized as an asset. A receivable is  recognized for any related cash collateral paid by Aegon. The difference between sale and repurchase price is treated as investment  income. If the Group subsequently sells that security, a liability to repurchase the asset is recognized and initially measured at fair  value. With the exception of cash collateral, assets received as collateral are not separately recognized as an asset until the financial asset  they secure is foreclosed. When cash collateral is recognized, a liability is recorded for the same amount.  All derivatives are recognized on the statement of financial position at fair value. All changes in fair value are recognized in the income  statement, unless the derivative has been designated as a hedging instrument in a cash flow hedge or a hedge of a net foreign  investment. Derivatives with positive fair values are reported as other assets and derivatives with negative values are reported as other  liabilities. Cash comprises cash at banks and in-hand. Cash equivalents are short-term highly liquid investments with original maturities of three  months or less that are readily convertible to known cash amounts, are subject to insignificant risks of changes in value and are held for  the purpose of meeting short-term cash requirements. Money market investments that are held for investment purposes (backing  insurance liabilities, investment liabilities or equity based on asset liability management considerations) are not included in cash and  cash equivalents but are presented as investment or investment for account of policyholders. Other assets include fixed assets, derivatives with positive fair values, other receivables and prepaid expenses. Other receivables are  recognized at fair value and are subsequently measured at amortized cost. An asset is impaired if the carrying amount exceeds the amount that would be recovered through its use or sale. Tangible, intangible  and financial assets, if not held at fair value through profit or loss, are tested for impairment when there are indications that the asset  may be impaired. Irrespective of the indications, goodwill and other intangible assets that are not amortized are tested at least  annually. For assets denominated in a foreign currency, a decline in the foreign exchange rates is considered an indication of  impairment.  Financial instruments that are issued by the company are classified as equity if they represent a residual interest in the assets of the  company after deducting all of its liabilities and the company has an unconditional right to avoid delivering cash or another financial  asset to settle its contractual obligation. In addition to common shares and preferred shares, the company has issued perpetual  securities. Perpetual securities have no final maturity date, repayment is at the discretion of Aegon and for junior perpetual capital  securities Aegon has the option to defer coupon payments at its discretion. The perpetual capital securities are classified as equity  rather than debt, are measured at par and those that are denominated in US dollars are translated into euro using historical  exchange rates. 2.5 Derivatives 2.6 Cash and cash equivalents 2.7 Other assets and receivables 2.8 Impairment of assets 2.9 Equity Annual Report 2013