AIG 2015 Annual Report Download - page 239

ITEM 8 / NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Reporting Discontinued Operations
In April 2014, the FASB issued an accounting standard that changes the requirements for presenting a component or group of
components of an entity as a discontinued operation and requires new disclosures. Under the standard, the disposal of a
component or group of components of an entity should be reported as a discontinued operation if the disposal represents a
strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Disposals of equity method
investments, or those reported as held-for-sale, must be presented as a discontinued operation if they meet the new definition.
The standard also requires entities to provide disclosures about the disposal of an individually significant component of an
entity that does not qualify for discontinued operations presentation.
We adopted the standard on its required effective date of January 1, 2015 on a prospective basis. The adoption of this
standard had no material effect on our consolidated financial condition, results of operations or 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 repurchase financings 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.
We adopted the standard on its required effective date of January 1, 2015 on a prospective basis. The adoption of this
standard had no material effect on our consolidated financial condition, results of operations or cash flows.
Future Application of Accounting Standards
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 certain other
agreements that are governed under other GAAP guidance, but could affect the revenue recognition for certain of our other
activities.
The standard is effective for interim and annual reporting periods beginning after December 15, 2017 and may be applied
retrospectively or through a cumulative effect adjustment to retained earnings at the date of adoption. Early adoption is
permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that
reporting period. We plan to adopt the standard on its required effective date of January 1, 2018 and are assessing the impact
of the standard on our consolidated financial condition, results of operations and 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.