AIG 2009 Annual Report Download - page 229

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2009, the Noncontrolling interests balance declined by $4.4 billion, of which
$1.4 billion related to the deconsolidation of Transatlantic in the second quarter of 2009 following the public offering
of 29.9 million shares of Transatlantic common stock, after which AIG retained 13.9 percent of Transatlantic common
stock outstanding. AIG recognized a pre-tax loss of $497 million related to the deconsolidation of Transatlantic. AIG
also restructured certain relationships within the Institutional Asset Management business in the second quarter of
2009, resulting in the deconsolidation of a subsidiary and a related decline in goodwill of $476 million and
noncontrolling interests of $1.9 billion for the year ended December 31, 2009, due to deconsolidation of certain
entities.
Noncontrolling interests also includes junior and senior non-voting, callable preferred interests issued in connection
with the $25 billion reduction in the outstanding balance and maximum borrowing commitment under the FRBNY
Credit Facility. See Note 16 herein for further discussion.
Disclosures about Derivative Instruments and Hedging Activities
In March 2008, the FASB issued an accounting standard that requires enhanced disclosures about (a) how and why
AIG uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and
(c) how derivative instruments and related hedged items affect AIG’s consolidated financial condition, results of
operations, and cash flows. AIG adopted the new standard on January 1, 2009. See Note 11 herein for related
disclosures.
Subsequent Events
In May 2009, the FASB issued an accounting standard that requires disclosure of the date through which a company
evaluated the events that occurred subsequent to the balance sheet date and whether that date represents the date the
financial statements were issued or were available to be issued. AIG adopted the new standard for the period ended
June 30, 2009. The adoption of the new standard did not affect AIG’s consolidated financial condition, results of
operations or cash flows.
Accounting for Transfers of Financial Assets and Repurchase Financing Transactions
In February 2008, the FASB issued an accounting standard that requires an initial transfer of a financial asset and a
repurchase financing that was entered into contemporaneously with or in contemplation of the initial transfer to be
evaluated as a linked transaction unless certain criteria are met. AIG adopted the new standard for new transactions
entered into from that date forward. The adoption of the new standard did not have a material effect on AIG’s
consolidated financial condition, results of operations or cash flows.
Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock
In June 2008, the FASB issued an accounting standard that addresses how to determine whether a financial
instrument (or embedded feature) is indexed to an entity’s own stock and therefore may not be accounted for as a
derivative instrument. AIG adopted the new standard on January 1, 2009, which resulted in a $15 million cumulative
effect adjustment to opening Accumulated deficit and a $91 million reduction in Additional paid-in capital.
Interim Disclosures about Fair Value of Financial Instruments
In April 2009, the FASB issued an accounting standard that requires companies to disclose in interim financial
statements information about the fair value of financial instruments (including methods and significant assumptions
used). The standard also requires the disclosures of summarized financial information for interim reporting periods.
AIG adopted the new standard on April 1, 2009.
221 AIG 2009 Form 10-K