American International Group Inc. says it will be delaying the release of its third-quarter earnings and restating all financial statements published since 2002 to correct accounting problems.[@@]
The problems relate mostly to accounting for derivatives, tax accounting and “reconciliation of certain balance sheet accounts,” according to AIG, New York.
The accounting problems led AIG to understate the consolidated retained earnings figure published for the second quarter by about $500 million, the company says.
In related news, AIG says it expects to report $1.7 billion in total net income for the third quarter.
AIG does not mention its life or annuity operations in the release announcing the earnings restatements.
Standard & Poor’s Ratings Services, New York, says it is taking no rating action in response to the restatement announcement.
Andrew Kligerman, a securities analyst at UBS Investment Research, New York, says the AIG restatement appears to be a byproduct of previously announced efforts to strengthen internal controls.