AIG 2014 Annual Report Download - page 240

ITEM 8 / NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

223
previously issued. We plan to adopt the standard on its required effective date of January 1, 2015 and do not expect the
adoption of the standard to have a material effect on our consolidated financial condition, results of operations or cash flows.
Revenue Recognition
In May 2014, the FASB issued an accounting standard that supersedes most existing revenue recognition guidance. The
standard excludes from its scope the accounting for insurance contracts, leases, financial instruments, and other agreements
that are governed under other GAAP guidance, but affects the revenue recognition for certain of our other activities.
The standard is effective for interim and annual reporting periods beginning after December 15, 2016 and may be applied
retrospectively or through a cumulative effect adjustment to retained earnings at the date of adoption. Early adoption is not
permitted. We plan to adopt the standard on its required effective date of January 1, 2017 and are assessing the impact of the
standard on our consolidated financial condition, results of operations and cash flows.
Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures
In June 2014, the FASB issued an accounting standard that changes the accounting for repurchase-to-maturity transactions
and repurchase financing arrangements. It also requires additional disclosures about repurchase agreements and other similar
transactions. The standard aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed
as a repurchase financing with the accounting for other typical repurchase agreements such that they all will be accounted for
as secured borrowings. The standard eliminates sale accounting for repurchase-to-maturity transactions and supersedes the
standard under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a
combined basis as a forward agreement.
The accounting standard and new disclosure requirements for certain transactions accounted for as sales are effective for
interim and annual reporting periods beginning after December 15, 2014, while the disclosure requirements for transactions
accounted for as secured borrowings are effective for annual reporting periods beginning after December 15, 2014 and for
interim reporting periods beginning after March 15, 2015. Early adoption is not permitted. We plan to adopt the standard on its
required effective dates and do not expect the adoption of the standard to have a material effect on our consolidated financial
condition, results of operations or cash flows.
Accounting for Share-Based Payments with Performance Targets
In June 2014, the FASB issued an accounting standard that clarifies the accounting for share-based payments when the terms
of an award provide that a performance target could be achieved after the requisite service period. The standard requires that
a performance target that affects vesting and that could be achieved after the requisite service period be treated as a
performance condition.
The standard is effective for interim and annual reporting periods beginning after December 15, 2015. Early adoption is
permitted. The standard may be applied prospectively to all awards granted or modified after the effective date or
retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period
presented in the financial statements and to all new or modified awards thereafter. We plan to adopt the standard on its
required effective date of January 1, 2016 and do not expect the adoption of the standard to have a material effect on our
consolidated financial condition, results of operations or cash flows.
Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity
In August 2014, the FASB issued an accounting standard that allows a reporting entity to measure the financial assets and
financial liabilities of a qualifying consolidated collateralized financing entity using the fair value of either its financial assets or
financial liabilities, whichever is more observable.