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ITEM 8 / NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.....................................................................................................................................................................................The following table presents the changes in goodwill by reportable segment:AIGProperty Aircraft(in millions) Casualty Leasing Other TotalBalance at December 31, 2010:Goodwill – gross $ 2,529 $ – $ 2,281 $ 4,810Accumulated impairments (1,196) – (2,281) (3,477)Net goodwill 1,333 – – 1,333Increase (decrease) due to:Acquisition 3 15 8 26Other (a) 14 – – 14Balance at December 31, 2011:Goodwill – gross $ 2,546 $ 15 $ 2,289 $ 4,850Accumulated impairments (1,196) – (2,281) (3,477)Net goodwill $ 1,350 $ 15 $ 8 $ 1,373Increase (decrease) due to:Acquisition 119 – – 119Other (a) – – – –Goodwill impairment included in discontinued operations – (15) (8) (23)Balance at December 31, 2012:Goodwill – grossAccumulated impairmentsNet goodwill(a) Includes foreign exchange translation and purchase price adjustments.$ 2,665 $ – $ 2,281 $ 4,946(1,196) – (2,281) (3,477)$ 1,469 $ – $ – $ 1,469(k) Separate accounts: Separate accounts represent funds for which investment income and investment gainsand losses accrue directly to the policyholders who bear the investment risk. Each account has specific investmentobjectives and the assets are carried at fair value. The assets of each account are legally segregated and are notsubject to claims that arise from any of our other businesses. The liabilities for these accounts are equal to theaccount assets.(l) Liability for unpaid claims and claims adjustment expense: For discussion of our accounting policies onliability for unpaid claims and claims adjustment expense, see Note 13 herein.(m) Future policy benefits for life and accident and health insurance contracts and policyholder contractdeposits: For discussion of our accounting policies on future policy benefits and life and accident and healthinsurance contracts and policyholder contract deposits, see Note 13 herein. See Note 6 herein for additional fairvalue information.(n) Other policyholder funds: Other policyholder funds are reported at cost and include any policyholder funds ondeposit that encompass premium deposits and similar items.(o) Income taxes: For a discussion of our accounting policies on income taxes, see Note 24 herein.(p) Other liabilities: Other liabilities consist of other funds on deposit, other payables, securities sold underagreements to repurchase and securities and spot commodities sold but not yet purchased. We have entered intocertain insurance and reinsurance contracts, primarily in our AIG Property Casualty segment, that do not containsufficient insurance risk to be accounted for as insurance or reinsurance. Accordingly, the premiums received onsuch contracts, after deduction for certain related expenses, are recorded as deposits within Other liabilities in theConsolidated Balance Sheet. Net proceeds of these deposits are invested and generate Net investment income. Asamounts are paid, consistent with the underlying contracts, the deposit liability is reduced. Also included in Otherliabilities are trade payables for the DIB and GCM, which include option premiums received and payables tocounterparties that relate to unrealized gains and losses on futures, forwards, and options and balances due toclearing brokers and exchanges. Trade payables for GCM also include cash collateral received from derivativecounterparties that is not contractually nettable against derivative assets...................................................................................................................................................................................................................................AIG 2012 Form 10-K 215