Google (NSDQ: GOOG) has filed its 10-Q quarterly, and some interesting language about how it continues to value its 5 percent stake in AOL: “We review our investment in AOL (NYSE: TWX) for impairment in accordance with FSP SFAS 115-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments (“FSP 115-1”). Based on our review, we believe our investment in AOL may be impaired. After consideration of the duration of the impairment, as well as the reasons for any decline in value and the potential recovery period, we do not believe that such impairment is “other-than-temporary” at June 30, 2008 as defined under FSP 115-1. As a result, our investment in this non-marketable equity security is carried at cost on our Consolidated Balance Sheets. We will continue to review this investment for impairment in the future. There can be no assurance that impairment charges will not be required in the future, and any such amounts may be material to our Consolidated Statements of Income. “

Translated, it means it Google is does not believe the current value of AOL is near $20 billion. Back in December 2005, Google paid about $1 billion for a 5 percent stake in AOL—though it’s debatable whether Google ever believed AOL was worth that much. It was a defensive move—preventing Microsoft (NSDQ: MSFT) from powering AOL search—so it paid a premium. There’s obviously some legalese here: the asset is still being booked “at cost” on the balance sheet (so no writedown just yet), but this is a new note not present in previous quarters, suggesting there’s been a financial trigger to cause this.

AOL meanwhile has just completed the process of splitting its ISP unit from the content/services unit, and the $10 billion number on the content/services unit has been bandied around ever since Microsoft made a bid for Yahoo.