NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AEGON N.V.  NOTE 2.8 - 2.10 96 Derecognition A financial asset is derecognized when the contractual rights to  the asset’s cash flows expire and, when the Group retains the  right to receive cash flows from the asset or has an obligation  to pay received cash flows in full without delay to a third party  and either: has transferred the asset and substantially all the  risks and rewards of ownership, or has neither transferred nor  retained all the risks and rewards but has transferred control of  the asset. Financial assets of which the group has neither  transferred nor retained significantly all the risk and rewards,  are recognized to the extent of the Group’s continuing  involvement. If significantly all risks are retained, the assets  are not derecognized. On derecognition, the difference between the disposal proceeds  and the carrying amount is recognized in the income statement  as a realized gain or loss. Any cumulative unrealized gain or  loss previously recognized in the revaluation reserve in  shareholders’ equity is also recognized in the income statement.  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.  Security lending and repurchase agreements 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. Collateral B. REAL ESTATE Property under construction With the exception of cash collateral, assets received as  collateral are not separately recognized as an asset until the  financial asset they secure defaults. When cash collateral is  recognized, a liability is recorded for the same amount.  Investments in real estate includes property held to earn rentals  or for capital appreciation, or both. Investments in real estate  are presented as investments. Property that is occupied by the  Group and that is not intended to be sold in the near future is  classified as real estate held for own use and is presented in  ‘Other assets and receivables’. The Group develops property itself with the intention to hold it  as investments in real estate. During the construction phase  both the land and the building are presented as investments in  real estate and carried at fair value unless this cannot be  determined reliably in which case the real estate is valued at  directly attributable costs, including borrowing costs. This  represents a change in accounting policy which has been  applied with effect from January 1, 2009. In prior years, such  real estate was included in ‘Other assets and receivables’,  carried at cost and not depreciated. When the construction  phase was completed, the properties were transferred to  investments in real estate at their carrying value and only then  On disposal of an asset, the difference between the net  proceeds received and the carrying amount is recognized in the  income statement. Any remaining surplus attributable to real  estate in own use in the revaluation reserve is transferred to  retained earnings. Valuations of both investments in real estate and real estate  held for own use are conducted with sufficient regularity to  ensure the value correctly reflects the fair value at the balance  sheet date. Valuations are mostly based on active market  prices, adjusted for any difference in the nature, location or  condition of the specific property. If such information is not  available, other valuation methods are applied, considering the  current cost of reproducing or replacing the property, the value  that the property’s net earning power will support and the value  indicated by recent sales of comparable properties. For property  held for own use, valuers may also consider the present value of  the future rental income cash flows that could be achieved had  the real estate been let out. All property is initially recognized at cost. Such cost includes the  cost of replacing part of the real estate and borrowing cost for  long term construction projects if recognition criteria are met.  Subsequently, investments in real estate are measured at fair  value with the changes in fair value recognized in the income  statement. Real estate held for own use is carried at its revalued  amount, which is the fair value at the date of revaluation less  subsequent accumulated depreciation and impairment losses.  Depreciation is calculated on a straight line basis over the  useful life of a building. Land is not depreciated. On revaluation  the accumulated depreciation is eliminated against the gross  carrying amount of the asset and the net amount is restated to  the revalued amount. Increases in the net carrying amount are  recognized in the related revaluation reserve in shareholders’  equity and are released to other comprehensive income over  the remaining useful life of the property.  Interest accrued to date is not included in the fair value of the  financial asset.