139 Equity instruments issued by the Group that are held by 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. In general, joint arrangements are contractual agreements whereby the Group undertakes with other parties an economic activity that  is subject to joint control. Joint control exists when it is contractually agreed to share control of an economic activity. Joint control exists  only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Aegon early adopted IFRS 11 - Joint arrangements, on January 1, 2013. This resulted in the Group changing its accounting policy for  its interests in joint arrangements. Under IFRS 11 investments in joint arrangements are classified as either joint operations or joint  ventures depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement.  Aegon has assessed the nature of its joint arrangements and determined them to be joint ventures. The accounting policy for joint  ventures will then be equity accounting and therefore joint ventures are no longer recognized using proportionate consolidated. Prior to January 1, 2013, Aegon's interests in joint ventures were 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 were recognized to the extent that they were attributable to the interests of other ventures, with the exception  of losses that were evidence of impairment and that were recognized immediately. The use of proportionate consolidation was  discontinued from the date on which the Group ceases to have joint control.The new policy for interests in joint ventures is included in  note 2.10. Aegon has applied the new policy for interests in joint ventures occurring on or after January 1, 2012, in accordance with  the transitional provisions of IFRS 11. The Group recognized its investment in joint ventures at January 1, 2012, as the total of  the carrying amounts of the assets and liabilities previously proportionately consolidated by the Group. This is the deemed cost of  the Group’s investments in joint ventures for applying the equity method of accounting. In accordance with the transitional provisions  of IFRS 11, comparative numbers of 2011 are not restated. The effects of the change in accounting policies on the financial position, comprehensive income, the cash flows and statement of  changes in equity of the group at January 1, 2012 and December 31, 2012 are included in note 2.1.2.  The Group’s consolidated financial statements are presented in euros. Items included in the financial statements of individual group  companies are recorded in their respective functional currency which is the currency of the primary economic environment in which each  entity operates. Transactions in foreign currencies are initially recorded at the exchange rate prevailing at the date of the transaction. At the balance sheet date, monetary assets and monetary liabilities in foreign currencies and own equity instruments in foreign  currencies are translated 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  other comprehensive income 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 other comprehensive income 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. b. Translation of foreign currency operations  a. Translation of foreign currency transactions  2.3 Foreign exchange translation b. Joint arrangements  Changes in accounting policy