AIG Revises Up 2010-2011 Income by $5.1B

American International Group Inc. said last month it revised up net income from 2010 and 2011 by a combined $5.096 billion after adopting an updated industry accounting standard from the Financial Accounting Standards Board.

The revised standard is called Accounting Standards Update No. 2010-26 (previously referred to as EITF Issue No. 09-G). The change reflects the effects of a change in accounting for deferred acquisition costs.

“The unaudited financial information contained in this financial supplement reflects the retrospective adoption of an accounting standard update on Jan. 1, 2012 that amends the accounting for costs incurred by insurance companies that can be capitalized in connection with acquiring or renewing insurance contracts,” AIG stated.

Previously, AIG’s 2011 full-year net income was reported as $17.798 billion. The revision added $2.824 billion, making the updated 2011 full-year net income $20.622 billion. For 2010, the previously reported full-year net income was $7.786 billion. The revision adds $2.272 billion, making the updated 2010 full-year income $10.058 billion.

Separately, AIG shares were recently upgraded to “outperform” by Wells Fargo Securities.

Since AIG restructured its ties to the U.S. government over a year ago, the insurer has been making progress in paying back the bailout money, Wells Fargo said last month. The government still holds a 70-percent stake in AIG.