SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2012

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of changes in goodwill by reportable segment

(in millions)	AIG Property Casualty			Aircraft Leasing			Other			Total
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
Increase (decrease) due to:
Acquisition		119			–			–			119
Other(a)		–			–			–			–
Goodwill impairment included in discontinued operations		–			(15	)		(8	)		(23	)
Balance at December 31, 2012:
Goodwill – gross	$	2,665		$	–		$	2,281		$	4,946
Accumulated impairments		(1,196	)		–			(2,281	)		(3,477	)
Net goodwill	$	1,469		$	–		$	–		$	1,469

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

Schedule of amounts previously reported, effect of change due to retrospective adoption of standard and the adjusted amounts reflected in consolidated financial statements

The following table presents amounts previously reported as of December 31, 2011, to reflect the effect of the change due to the retrospective adoption of the standard, and the adjusted amounts that are reflected in our Consolidated Balance Sheet.

December 31, 2011 (in millions)	As Previously Reported		Effect of Change			As Currently Reported
Balance Sheet:
Deferred income taxes	$	17,897	$	1,718		$	19,615
Deferred policy acquisition costs		14,026		(5,089	)		8,937
Other assets		11,705		(42	)		11,663
Total assets		556,467		(3,413	)		553,054
Retained earnings		14,332		(3,558	)		10,774
Accumulated other comprehensive income		6,336		145			6,481
Total AIG shareholders' equity		104,951		(3,413	)		101,538

The following tables present amounts previously reported for the years ended December 31, 2011 and 2010 to reflect the effect of the change due to the retrospective adoption of the standard, and the adjusted amounts that are reflected in our Consolidated Statement of Operations and Consolidated Statement of Cash Flows.

Year Ended December 31, 2011 (dollars in millions, except per share data)	As Previously Reported(a)			Effect of Change			As Currently Reported
Statement of Operations:
Total net realized capital gains	$	681		$	20		$	701
Total revenues		59,792			20			59,812
Interest credited to policyholder account balances		4,446			21			4,467
Amortization of deferred acquisition costs		8,019			(2,533	)		5,486
Other acquisition and other insurance expenses		6,091			2,367			8,458
Net (gain) loss on sale of properties and divested businesses		74			–			74
Total benefits, claims and expenses		59,840			(144	)		59,696
Income (loss) from continuing operations before income tax benefit		(48	)		164			116
Income tax benefit(b)		(17,696	)		(1,728	)		(19,424	)
Income from continuing operations		17,648			1,892			19,540
Income from discontinued operations, net of income tax expense(c)		858			932			1,790
Net income		18,506			2,824			21,330
Net income attributable to AIG		17,798			2,824			20,622
Net income attributable to AIG common shareholders		16,986			2,824			19,810
Income per share attributable to AIG common shareholders:
Basic and diluted
Income from continuing operations	$	8.98		$	1.05		$	10.03
Income from discontinued operations	$	0.46		$	0.52		$	0.98

(a)     Includes $140 million in Total net realized capital gains attributable to the effect of the reclassification of certain derivative activity discussed in Note 1 herein. Also includes the effect of the reclassification of ILFC as discontinued operations.

(b)     Includes an adjustment to the deferred tax valuation allowance of $1.8 billion in the fourth quarter of 2011.

(c)     Represents the effect on the gain on sale of AIG Star and AIG Edison which were sold in first quarter of 2011.

Year Ended December 31, 2010 (dollars in millions, except per share data)	As Previously Reported(a)			Effect of Change			As Currently Reported
Statement of Operations:
Total net realized capital losses	$	(727	)	$	11		$	(716	)
Total revenues		72,818			11			72,829
Interest credited to policyholder account balances		4,480			7			4,487
Amortization of deferred acquisition costs		9,134			(3,313	)		5,821
Other acquisition and other insurance expenses		6,775			3,388			10,163
Net (gain) loss on sale of properties and divested businesses(b)		(17,767	)		(1,799	)		(19,566	)
Total benefits, claims and expenses		54,301			(1,719	)		52,582
Income from continuing operations before income tax expense		18,517			1,730			20,247
Income tax expense(c)		6,116			877			6,993
Income from continuing operations		12,401			853			13,254
Income (loss) from discontinued operations, net of income tax expense(d)		(2,388	)		1,419			(969	)
Net income		10,013			2,272			12,285
Net income attributable to AIG		7,786			2,272			10,058
Net income attributable to AIG common shareholders		1,583			463			2,046
Income (loss) per share attributable to AIG common shareholders:
Basic and diluted
Income from continuing operations	$	15.23		$	1.27		$	16.50
Loss from discontinued operations	$	(3.63	)	$	2.11		$	(1.52	)

(a)     Includes $783 million in Total net realized capital gains attributable to the effect of the reclassification of certain derivative activity discussed in Note 1 herein. Also includes the effect of the reclassification of ILFC as discontinued operations.

(b)     Represents the effect on the gain on sale of AIA ordinary shares, which were sold in the fourth quarter of 2010.

(c)     Includes the tax impact to the AIA gain adjustment of $1.0 billion in the fourth quarter of 2010.

(d)     Includes an adjustment to the after-tax gain on the sale of ALICO of $1.6 billion in the fourth quarter of 2010.

Adoption of the standard did not affect the previously reported totals for net cash flows provided by (used in) operating, investing, or financing activities, but did affect the following components of net cash flows provided by (used in) operating activities.

Year Ended December 31, 2011 (in millions)	As Previously Reported(a)			Effect of Change			As Currently Reported
Cash flows from operating activities:
Net income	$	18,506		$	2,824		$	21,330
(Income) loss from discontinued operations		(858	)		(932	)		(1,790	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Noncash revenues, expenses, gains and losses included in income (loss):
Unrealized gains in earnings – net		(937	)		(20	)		(957	)
Depreciation and other amortization		7,935			(2,511	)		5,424
Changes in operating assets and liabilities:
Capitalization of deferred policy acquisition costs		(7,796	)		2,367			(5,429	)
Current and deferred income taxes – net		(18,333	)		(1,728	)		(20,061	)
Total adjustments		(23,904	)		(1,892	)		(25,796	)

Year Ended December 31, 2010 (in millions)	As Previously Reported(a)			Effect of Change			As Currently Reported
Cash flows from operating activities:
Net income	$	10,013		$	2,272		$	12,285
(Income) loss from discontinued operations		2,388			(1,419	)		969
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Noncash revenues, expenses, gains and losses included in income (loss):
Net (gains) losses on sales of divested businesses		(17,767	)		(1,799	)		(19,566	)
Unrealized gains in earnings – net		(1,509	)		(20	)		(1,529	)
Depreciation and other amortization		8,488			(2,511	)		5,977
Changes in operating assets and liabilities:
Capitalization of deferred policy acquisition costs		(8,300	)		2,367			(5,933	)
Current and deferred income taxes – net		7,780			(1,728	)		6,052
Total adjustments	$	(5,201	)	$	(1,892	)	$	(7,093	)

(a)     Includes the effect of the reclassification of ILFC as discontinued operations.