One blunder may slightly offset another as American International Group (AIG) sorts out its complicated accounting and derivatives errors. The company issued an 11-page statement that was hammered out by accountants, auditors and attorneys over the weekend, the Street.com reported.

The company said plans to restate its fiscal 2000, 2001, 2002 and 2003 statements and the March, June and September quarters for 2004. Moody's dropped its rating of AIG's long-term debt to Aa2 from Aa1 in the wake of the news.

In what might be good news for the restatement-which will amount to $1 billion more than expected and reduce shareholder equity by $2.7 billion or 3.3 percent-an adjustment to the company's derivatives portfolio could soften the blow of the restatement. The derivative adjustment will be counted against the bottom line, taking about $300 million off the total lost by investors, the Street.com reported.

The company also missed another Securities and Exchange Commission deadline to file its 10-K annual report, which is now expected on May 31.

"We are disappointed that we have not yet been able to file our Form 10-K," Martin J. Sullivan, AIG president and chief executive officer, told the Street.com. "We are working diligently to complete the filing, at the same time assuring we have accurate financial statements, rigorous accounting, greater transparency and thorough disclosure.

"We now know that there were serious issues with our internal controls, and that it is necessary for us to address those issues and strengthen our controls," he said.

The company's auditor, PricewaterhouseCoopers, plans to issue an adverse opinion regarding AIG's internal control over financial reporting, according to the Wall Street Journal, which was quoting AIG.

In another matter, New York Attorney General Eliot Spitzer is looking into how AIG accounted for some transactions with some subsidiaries, the Street.com reported.