How is FS made?

I was wondering how is Flight Sim being made? Do they always have to start modeling all planes, hills, mountains, terrain, mesh, rivers, houses over again or do they just edit previously made terains, river, etc? Like for example in order to make FS2002 terrain mesh, rivers, houses, they had to just edit FS2000 terain, rivers etc and to make FS2004 they had to edit FS2002 terrain, rivers etc? Or do they just start everything from scratch and model everything over again? Any replies would be greatly appriciated! 
JVC_systems

JVC_systems