173 Shares Goodwill Valuation of defined benefit plans Recognition of deferred tax assets Deferred tax assets are established for the tax benefit related to deductible temporary differences, carry forwards of unused tax losses  and carry forwards of unused tax credits when in the judgment of management it is probable that Aegon will receive the tax benefits.  Since there is no absolute assurance that these assets will ultimately be realized, management reviews Aegon’s deferred tax positions  periodically to determine if it is probable that the assets will be realized. Periodic reviews include, among other things, the nature  and amount of the taxable income and deductible expenses, the expected timing when certain assets will be used or liabilities will be  required to be reported and the reliability of historical profitability of businesses expected to provide future earnings. Furthermore,  management considers tax-planning strategies it can utilize to increase the likelihood that the tax assets will be realized. These  strategies are also considered in the periodic reviews. The liabilities or assets recognized in the statement of financial position in respect of defined benefit plans is the difference between  the present value of the projected defined benefit obligation at the balance sheet date and the fair value of plan assets. The present  value of the defined benefit obligation is determined by discounting the estimated future cash flows using interest rates of high-quality  corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity that approximate  the terms of the related pension liability. Actuarial assumptions used in the measurement of the liability include the discount rate,  estimated future salary increases, mortality rates and price inflation. To the extent that actual experience deviates from these  assumptions, the valuation of defined benefit plans and the level of pension expenses recognized in the future may be affected. The valuation utilized the best available information, including assumptions and projections considered reasonable and supportable by  management. The assumptions used in the valuation involve significant judgments and estimates. Refer to note 21 for more details. Goodwill is reviewed and tested for impairment under a fair value approach. Goodwill must be tested for impairment at least annually  or more frequently as a result of an event or change in circumstances that would indicate an impairment charge may be necessary.  The recoverable amount is the higher of the value in use and fair value less costs to sell for a cash-generating unit. Impairment testing  requires the determination of the value in use or fair value less costs for each of Aegon’s identified cash generating units.  Objective evidence of impairment of an investment in an equity instrument classified as available-for-sale includes information about  significant changes with an adverse effect that have taken place in the technological, market, economic or legal environment in which  the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered. A significant or  prolonged decline in the fair value of an investment in an equity instrument below its cost is also objective evidence of impairment.  Significant or prolonged decline is defined as an unrealized loss position for more than six months or a fair value of less than 80%  of the original cost price of the investment. Additionally, as part of an ongoing process, the equity analysts actively monitor earnings  releases, company fundamentals, new developments and industry trends for any signs of possible impairment. If an available-for-sale  equity security is impaired based upon Aegon’s qualitative or quantitative impairment criteria, any further declines in the fair value  at subsequent reporting dates are recognized as impairments. Therefore, at each reporting period, for an equity security that is  determined to be impaired based upon Aegon’s impairment criteria, an impairment is recognized for the difference between the fair  value and the original cost basis, less any previously recognized impairments.  Other ABS securities are monitored and reviewed on a monthly basis. Where ratings have declined to below investment grade,  the individual debt securities have been modeled. Results are then closely analyzed by the asset specialist to determine whether or  not a principal or interest loss is expected to occur. Aegon will impair its particular tranche to fair value where it would not be able to  receive all contractual cash flows.  Commercial mortgage-backed securities (CMBS) are monitored and reviewed on a monthly basis. Detailed cash flow models using  the current collateral pool and capital structure on the portfolio are performed quarterly. Model output is generated under base and  several stress-case scenarios by Aegon’s CMBS asset specialists. For conduit securities, a widely recognized industry modeling software  is used to perform a loan-by-loan, bottom-up approach to modeling. For non-conduit securities, a CMBS asset specialist works closely  with Aegon’s real estate valuation group to determine underlying asset valuation and risk. Both methodologies incorporate external  estimates on the property market, capital markets, property cash flows, and loan structure. Results are then closely analyzed by  the asset specialist to determine whether or not a principal or interest loss is expected to occur. Aegon will impair a particular tranche  to fair value where it would not be able to receive all contractual cash flows. 