Equity instruments issued by the Group that are held by the  investment funds are eliminated on consolidation. However, the  elimination is reflected in equity and not in the measurement of  the related financial liabilities towards policyholders or other  third parties. Interests in joint ventures are recognized using proportionate  consolidation, combining items on a line by line basis from the  date the jointly controlled interest commences. Gains and losses  on transactions between the Group and the joint venture are  recognized to the extent that they are attributable to the  interests of other ventures, with the exception of losses that are  evidence of impairment and that are recognized immediately.  The use of proportionate consolidation is discontinued from  the date on which the Group ceases to have joint control.  The acquisition of an interest in a joint venture may result in  goodwill, which is accounted for consistently with the goodwill  recognized on the purchase of a subsidiary.  The Group’s consolidated financial statements are prepared in  euros which is also the Company’s functional currency. That is  the currency of the primary economic environment in which  the Company operates. Each company in the Group determines  its own functional currency and items included in the financial  statements of each entity are measured using that functional  currency. Transactions in foreign currencies are initially  recorded at the functional currency rate prevailing at the date  of the transaction.  At the balance sheet date monetary assets and monetary  liabilities in foreign currencies are retranslated to the functional  currency at the closing rate of exchange prevailing on that date.  Non-monetary items carried at cost are translated using the  exchange rate at the date of the transaction, whilst assets  carried at fair value are translated at the exchange rate when  the fair value was determined.  Exchange differences on monetary items are recognized in  the income statement when they arise, except when they are  deferred in equity as a result of a qualifying cash flow or net  investment hedge. Exchange differences on non-monetary  items carried at fair value are recognized in equity or the  income statement, consistently with other gains and losses  on these items.  On consolidation, the financial statements of group entities  with a foreign functional currency are translated to euro, the  currency in which the consolidated financial statements are  presented. Assets and liabilities are translated at the closing  rates on the balance sheet date. Income, expenses and capital  transactions (such as dividends) are translated at average  exchange rates or at the prevailing rates on the transaction  date, if more appropriate. Goodwill and fair value adjustments  arising on the acquisition of a foreign entity are translated  at the closing rates on the balance sheet date.  The resulting exchange differences are recognized in the  ‘foreign currency translation reserve’, which is part of  shareholders’ equity. On disposal of a foreign entity the related  cumulative exchange differences included in the reserve are  recognized in the income statement. On transition to IFRS on January 1, 2004, the foreign currency  translation reserve was reset to nil. Starting January 1, 2010, AEGON introduced a new reporting  format for segment reporting that aligns with changes  implemented in the way AEGON manages its business. AEGON’s  operating segments are based on the businesses as presented  in internal reports that are regularly reviewed by the Executive  Board which is regarded as the ’chief operating decision maker’.  The operating segments are:  NOTE 2.4 FOREIGN EXCHANGE TRANSLATION A. TRANSLATION OF FOREIGN CURRENCY TRANSACTIONS NOTE 2.5 SEGMENT REPORTING B. JOINTLY CONTROLLED ENTITIES  Joint ventures are contractual agreements whereby the Group  B. TRANSLATION OF FOREIGN CURRENCY OPERATIONS  undertakes with other parties an economic activity that is  subject to joint control. ■ AEGON Americas: Covers business units in the United States,  Canada, Mexico and Brazil, including any of the units’  activities located outside these countries. ■ AEGON The Netherlands: Covers businesses operating  in the Netherlands. ■ AEGON UK: Covers businesses operating in the  United Kingdom. ■ New Markets: Covers businesses operating in Central & Eastern  Europe, Asia, Spain and France as well as AEGON’s variable  annuity activities in Europe and AEGON Asset Management. ■ Holding and other activities: Includes fi nancing, employee  and other administrative expenses of Holding companies. In addition, AEGON made the following other changes: ■ The use of ’operating earnings’ is discontinued to further  simplify AEGON’s reporting and to focus on the key  performance indicator ’underlying earnings’. ■ The line item ’Run-off businesses’ is introduced which  includes earnings of certain business units where  management has decided to exit the market and to run-off  the existing block of business. Currently, this line item  includes the earnings of the institutional spread-based  business and structured settlements (payout annuities)  92 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AEGON N.V.  NOTE 2.3 - 2.5