AIG 2010 Annual Report Download - page 248

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Amendment to Impairment Guidance
In January 2009, the FASB issued an accounting standard that amends the impairment guidance on recognition
of interest income and impairment on purchased beneficial interests and beneficial interests that continue to be
held by a transferor in securitized financial assets to achieve more consistent determination of whether an
other-than-temporary impairment has occurred. The standard also retains and emphasizes the objective of an
other-than-temporary impairment assessment and the related disclosure requirements related to the accounting for
certain investments in fixed maturity and equity securities and other related guidance. AIG adopted this guidance
in the fourth quarter of 2008. The effects of adopting the standard on AIG’s consolidated financial condition,
results of operations and cash flows were not material.
3. Segment Information
AIG reports the results of its operations through three reportable segments: Chartis, SunAmerica and Financial
Services. AIG evaluates performance based on pre-tax income (loss), excluding results from discontinued
operations and net (gains) losses on sales of divested businesses, because AIG believes that this provides more
meaningful information on how its operations are performing.
In order to align financial reporting with changes made during 2010 to the manner in which AIG’s chief
operating decision makers review the businesses to make decisions about resources to be allocated and to assess
performance, the following changes were made to AIG’s segment information.
• As a result of the IPO of AIA on October 29, 2010, the results of AIA for the eleven-month period of
AIG’s ownership are now presented in AIG’s Other operations category as part of Divested businesses.
Divested businesses include the historical results of divested entities that did not meet the criteria for
discontinued operations accounting as well as certain non-core businesses currently in run-off. As a result,
AIG no longer has a Foreign Life Insurance & Retirement Services reportable segment.
• As a result of AIG’s sale of ALICO and AGF, discussed in Note 1 herein, these businesses are presented in
discontinued operations and are no longer reported as part of the Foreign Life Insurance & Retirement
Services and Financial Services segments, respectively. AIG’s remaining foreign life and consumer finance
businesses are now reported in AIG’s Other operations category as part of Divested businesses.
• As a result of AIG’s entering into an agreement to sell AIG Star and AIG Edison, AIG Star and AIG
Edison are presented in discontinued operations and are no longer reported as part of the Foreign Life
Insurance & Retirement Services segment.
• During 2010, AIG’s Asset Management Group undertook the management responsibilities for non-derivative
assets and liabilities of the Capital Markets businesses of the Financial Services segment. The assets are
being managed by the Asset Management Group in concert with the Matched Investment Program (MIP) to
service the associated liabilities. Accordingly, gains and losses related to these assets and liabilities, primarily
consisting of credit valuation adjustment gains and losses are reported in AIG’s Other operations category as
part of Asset Management — Direct Investment business.
• Intercompany interest related to loans from AIG Funding, Inc. (AIG Funding) to AIGFP is no longer being
allocated to Capital Markets from Other operations.
The remaining Capital Markets derivatives business continues to be reported in the Financial Services segment
as part of Capital Markets results.
Prior periods have been revised to conform to the current period presentation for the above changes.
232 AIG 2010 Form 10-K