AIG 2009 Annual Report Download - page 231

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly
In April 2009 the FASB issued an accounting standard that provides guidance for estimating the fair value of assets
and liabilities when the volume and level of activity for an asset or liability have significantly decreased and for
identifying circumstances that indicate a transaction is not orderly. The new standard also requires extensive
additional fair value disclosures. The adoption of the new standard on April 1, 2009, did not have a material effect on
AIG’s consolidated financial condition, results of operations or cash flows.
Employers’ Disclosures about Postretirement Benefit Plan Assets
In December 2008, the FASB issued an accounting standard that requires more detailed disclosures about an
employer’s plan assets, including the employer’s investment strategies, major categories of plan assets, concentrations
of risk within plan assets, and valuation techniques used to measure the fair values of plan assets. The new standard
was effective for fiscal years ending after December 15, 2009. The adoption of the new standard had no effect on
AIG’s consolidated financial condition, results of operations or cash flows. See Note 19 herein for disclosures.
Measuring Liabilities at Fair Value
In August 2009, the FASB issued an accounting standard to clarify how the fair value measurement principles
should be applied to measuring liabilities carried at fair value. The new standard explains how to prioritize market
inputs in measuring liabilities at fair value and what adjustments to market inputs are appropriate for debt obligations
that are restricted from being transferred to another obligor. The new standard was effective beginning October 1,
2009 for AIG. The adoption of the new standard did not have a material effect on AIG’s consolidated financial
condition, results of operations or cash flows.
Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)
In September 2009, the FASB issued an accounting standard that permits, as a practical expedient, a company to
measure the fair value of an investment that is within the scope of the update on the basis of the net asset value per
share of the investment (or its equivalent) if that value is calculated in accordance with fair value as defined by the
FASB. The standard also requires enhanced disclosures. The new standard applies to investment companies that do
not have readily determinable fair values such as certain hedge funds and private equity funds. The new standard was
effective for interim and annual periods ending after December 15, 2009. The adoption of the new standard did not
have a material effect on AIG’s consolidated financial condition, results of operations or cash flows. See Note 5 herein
for disclosure.
Accounting and Reporting for Decreases in Ownership of a Subsidiary
In January 2010, the FASB issued an accounting standard that clarifies that the partial sale and deconsolidation
provisions of the accounting standards addressing consolidation should be applied to (1) a business that is not in the
legal form of a subsidiary, (2) transactions with equity method investees and joint ventures, (3) exchanges of groups of
assets that constitute businesses for noncontrolling interests in other entities, (4) the deconsolidation of a subsidiary
that does not qualify as a business if the substance of the transaction is not addressed directly by other guidance, and
that the accounting standards addressing consolidation do not apply to the sales of in-substance real estate. The
adoption of the new standard did not have a material effect on AIG’s consolidated financial condition, results of
operations or cash flows.
223 AIG 2009 Form 10-K