AIG 2010 Annual Report Download - page 245

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the components of the change in AIG shareholders’ equity at April 1, 2009 due to
the adoption of the new accounting standard for other-than-temporary impairments:
Accumulated
Other AIG
Accumulated Comprehensive Shareholders’
(in billions) Deficit Loss Equity
Increase (decrease) to:
Net effect of the increase in amortized cost of available for sale fixed
maturity securities $ 16.1 $ (16.1) $ —
Net effect of related DAC, SIA and other insurance balances (1.8) 1.8 —
Net effect on deferred income tax assets (2.5) 5.0 2.5
Net increase in AIG shareholders’ equity $ 11.8 $ (9.3) $ 2.5
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 20 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 6 herein for disclosure.
AIG 2010 Form 10-K 229