98 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AEGON N.V.  NOTE 2.10 - 2.16 released to the income statement to coincide with the hedged  transaction, except when the hedged transaction is an  acquisition of a non-financial asset or liability. In this case,  the amount in shareholders’ equity is included in the initial  cost of the asset or liability. and is subject to impairment testing. The net assets are  determined based on the Group’s accounting policies. Any gains  and losses recorded in other comprehensive income by the  associate are reflected in other reserves in shareholders’ equity,  while the share in the associate’s net income is recognized as  a separate line item in the consolidated income statement.  The Group’s share in losses is recognized until the investment  in the associate’s equity and any other long-term interest that  are part of the net investment are reduced to nil, unless  guarantees exist. Net investment hedges are hedges of currency exposures  on a net investment in a foreign operation. To the extent that  the hedge is effective, the change in the fair value of the  hedging instrument is recognized in shareholders’ equity.  Any ineffectiveness is recognized in the income statement.  The amount in shareholders’ equity is released to the  income statement when the foreign operation is disposed of. Gains and losses on transactions between the Group and the  associate are eliminated to the extent of the Group’s interest  in the entity, with the exception of losses that are evidence  of impairment which are recognized immediately. Own equity  instruments of AEGON N.V. that are held by the associate are  not eliminated. Hedge accounting is discontinued prospectively for hedges that  are no longer considered effective. When hedge accounting is  discontinued for a fair value hedge, the derivative continues to  be carried on the balance sheet with changes in its fair value  recognized in the income statement. When hedge accounting is  discontinued for a cash flow hedge because the cash flow is no  longer expected to occur, the accumulated gain or loss in  shareholders’ equity is recognized immediately in the income  statement. In other situations where hedge accounting is  discontinued for a cash flow hedge, including those where the  derivative is sold, terminated or exercised, accumulated gains  or losses in shareholders’ equity are amortized into the income  statement when the income statement is impacted by the  variability of the cash flow from the hedged item.  On disposal of an interest in an associate, the difference  between the net proceeds and the carrying amount is  recognized in the income statement and gains and losses  previously recorded directly in the revaluation reserve are  reversed and recorded through the income statement. Reinsurance contracts are contracts entered into by the Group  in order to receive compensation for losses on contracts written  by the Group (outgoing reinsurance). For contracts transferring  sufficient insurance risk, a reinsurance asset is recognized for  the expected future benefits, less expected future reinsurance  premiums. Reinsurance contracts with insufficient insurance  risk transfer are accounted for as investment or service  contracts, depending on the nature of the agreement. Reinsurance assets are measured consistently with the  amounts associated with the underlying insurance contracts  and in accordance with the terms of each reinsurance contract.  They are subject to impairment testing and are derecognized  when the contractual rights are extinguished or expire or when  the contract is transferred to another party. Entities over which the Group has significant influence through  power to participate in financial and operating policy decisions,  but which do not meet the definition of a subsidiary or joint  venture, are accounted for using the equity method. Interests  held by venture capital entities, mutual funds and investment  funds that qualify as an associate are accounted for as an  investment held at fair value through profit or loss. Interests  held by the Group in venture capital entities, mutual funds and  investment funds that are managed on a fair value basis, are  also accounted for as investments held at fair value through  profit or loss. Interests in associates are initially recognized at cost, which  includes positive goodwill arising on acquisition. Negative  goodwill is recognized in the income statement on the  acquisition date. If associates are obtained in successive share  purchases, each significant transaction is accounted for  separately.  The carrying amount is subsequently adjusted to reflect the  change in the Group’s share in the net assets of the associate  Acquisition costs are deferred to the extent that they are  recoverable and are subsequently amortized based on either  the expected future premiums or the expected gross profit  DPAC relates to all insurance contracts and investment  contracts with discretionary participation features and  represents the variable costs that are related to the acquisition  or renewal of these contracts.  A. DEFERRED POLICY ACQUISITION COSTS  NOTE 2.13 DEFERRED EXPENSES AND REBATES NOTE 2.11 INVESTMENTS IN ASSOCIATES NOTE 2.12 REINSURANCE ASSETS