SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2011

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of changes in goodwill by reportable segment

(in millions)			Chartis			Aircraft Leasing		Other			Total
Balance at December 31, 2009:
	Goodwill – gross		$	2,480		$	-	$	7,192		$	9,672
	Accumulated impairments			(1,196	)		-		(2,281	)		(3,477	)
	Net goodwill			1,284			-		4,911			6,195
	Increase (decrease) due to:
		Acquisition		33			-		-			33
		Sales of business units		-			-		(69	)		(69	)
		Other(a)		16			-		(86	)		(70	)
		Goodwill impairment included in discontinued operations		-			-		(4,625	)		(4,625	)
		Dispositions(b)		-			-		(131	)		(131	)
Balance at December 31, 2010:
	Goodwill – gross		$	2,529		$	-	$	2,281		$	4,810
	Accumulated impairments			(1,196	)		-		(2,281	)		(3,477	)
	Net goodwill		$	1,333		$	-	$	-		$	1,333
	Increase (decrease) due to:
		Acquisition		3			15		8			26
		Other(a)		14			-		-			14
Balance at December 31, 2011:
	Goodwill – gross		$	2,546		$	15	$	2,289		$	4,850
	Accumulated impairments			(1,196	)		-		(2,281	)		(3,477	)
	Net goodwill		$	1,350		$	15	$	8		$	1,373

(a)

Includes foreign exchange translation and purchase price adjustments (PPA).

(b)

Reflects the deconsolidation of AIA.

New accounting standard for variable interest entities

Statement

Change in accounting principle

The following table summarizes the two methods applied by AIG and the amount and classification in the Consolidated Balance Sheet of the assets and liabilities consolidated as a result of the adoption of the standard on January 1, 2010:

		Transition Methods
(in millions)		Fair Value Option		Carrying Value		Total
Assets:
	Bond trading securities, at fair value	$	1,239	$	1,262	$	2,501
	Mortgage and other loans receivable		-		1,980		1,980
	Other invested assets		-		480		480
	Other asset accounts		194		150		344
	Assets held for sale		4,630		-		4,630
Total Assets		$	6,063	$	3,872	$	9,935
Liabilities:
	FRBNY commercial paper funding facility	$	1,088	$	-	$	1,088
	Other long-term debt		-		1,533		1,533
	Other liability accounts		1		31		32
	Liabilities held for sale		4,525		-		4,525
Total Liabilities		$	5,614	$	1,564	$	7,178

Consolidation of VIE -increase or decrease from previously reported amounts

Statement

Change in accounting principle

The following table summarizes the excess of amounts previously recorded upon the consolidation of previously unconsolidated VIEs, as a result of the adoption of the standard on January 1, 2010:

(in billions)
Assets		$	8.2
Liabilities			7.1
Redeemable noncontrolling interest			1.1
Equity:
	Accumulated deficit		0.2
	Accumulated other comprehensive income		(0.3	)
	Other noncontrolling interests		0.1
Total liabilities and equity		$	8.2

New accounting standard for other-than-temporary impairments

Statement

Change in accounting principle

The following table presents the components of the change in AIG shareholders' equity at April 1, 2009 due to the adoption of the accounting standard for other-than-temporary impairments:

(in billions)		Accumulated Deficit			Accumulated Other Comprehensive Loss			AIG Shareholders' 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