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The preparation of financial statements in accordance with GAAP requires the application of accounting policies that

often involve a significant degree of judgment. Accounting policies that we believe are most dependent on the

application of estimates and assumptions are considered our critical accounting estimates and are related to the

determination of:

• classification of ILFC as held for sale and related fair value measurement;

• income tax assets and liabilities, including recoverability of our net deferred tax asset and the predictability of

future tax operating profitability of the character necessary to realize the net deferred tax asset;

• liability for unpaid claims and claims adjustment expense;

• reinsurance assets;

• valuation of future policy benefit liabilities and timing and extent of loss recognition;

• valuation of liabilities for guaranteed benefit features of variable annuity products;

• estimated gross profits to value deferred acquisition costs for investment-oriented products;

• impairment charges, including other-than-temporary impairments on available for sale securities, impairments on

investments in life settlements and goodwill impairment;

• liability for legal contingencies; and

• fair value measurements of certain financial assets and liabilities.

These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the

time of estimation. To the extent actual experience differs from the assumptions used, our consolidated financial

condition, results of operations and cash flows could be materially affected.

The following table identifies our significant accounting policies presented in other Notes to these Consolidated

Financial Statements, with a reference to the Note where a detailed description can be found:

Note 4. Held-for-Sale Classification, Divested Businesses and Discontinued Operations

• Held-for-sale classification

• Discontinued operations

Note 6. Investments

• Fixed maturity and equity securities

• Other invested assets

• Short-term investments

• Net investment income

• Net realized capital gains (losses)

• Other-than-temporary impairments

Note 7. Lending Activities

• Mortgage and other loans receivable – net of allowance

Note 8. Reinsurance

• Reinsurance assets – net of allowance

Note 9. Deferred Policy Acquisition Costs

• Deferred policy acquisition costs

• Amortization of deferred policy acquisition costs

Note 11. Derivatives and Hedge Accounting

• Derivative assets and liabilities, at fair value

Use of Estimates

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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AIG 2013 Form 10-K 217

ITEM 8 / NOTE 1. BASIS OF PRESENTATION

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