All in a days work...

[btm]

GM posts $42 billion loss

http://www.news.com.au/business/story/0,23636,22722782-14334,00.html

GENERAL Motors has posted a loss of $US39 billion ($42 billion) for the third quarter on a massive accounting charge, even as it cited some improvement in its global automotive operations.

The whopping loss was attributed to a $US38.6 billion ($41.75 billion) non-cash charge largely related to establishing a valuation allowance against deferred tax assets in the US, Canada and Germany, as well as mortgage losses at GM's former financial arm, GMAC Financial Services.

A valuation allowance is taken when the future benefit of the deferred tax assets is less likely to be realised.

The net loss amounted to $US68.85 per share, compared with a net loss of $US147 million ($158.98 million), or 26 cents per share, in the third quarter of last year.

The huge loss helped drag down US stocks. The Dow Jones industrial average was down 239.80 points, or 1.76 per cent, at 13,421.14. The Standard & Poor's 500 Index was down 29.37 points, or 1.93 per cent, at 1490.90.

The Nasdaq Composite Index was down 49.73 points, or 1.76 per cent, at 2775.45.

[USC]

lol... they should stop wasting time and money making sports van....

[Huhness]

See what happens when they don't bring all the Opels to Australia! See!! Can't you See!! :D

Hang on is Ford not bankrupt yet??? :eek:

[btm]

can it get any worse for them?

[cbrmale]

Don't tell me the Yanks aren't buying gas-guzzling SUV's anymore! I suspect Toyota, Honda, Hyundai (etc) in the US are making money at GMs expense. And the improvement in global operations, would that be Opel by any chance?

For those of you who aren't accountants, an asset write-down on revaluation works like this:

Debit (increase) expenses (in this case Tax Expense)
Credit (decrese) assets (in this case Deferred Tax)

What would have happened in past years is the reverse, the asset called 'Deferred Tax' would have been created by decreasing the expense item called 'Tax'. So, profits have been inflated in previous years and for some reason it has been decided the tax deferral cannot be realised and it has been revalued this quarter.

[Huhness]

Don't tell me the Yanks aren't buying gas-guzzling SUV's anymore! I suspect Toyota, Honda, Hyundai (etc) in the US are making money at GMs expense. And the improvement in global operations, would that be Opel by any chance?

For those of you who aren't accountants, an asset write-down on revaluation works like this:

Debit (increase) expenses (in this case Tax Expense)
Credit (decrese) assets (in this case Deferred Tax)

What would have happened in past years is the reverse, the asset called 'Deferred Tax' would have been created by decreasing the expense item called 'Tax'. So, profits have been inflated in previous years and for some reason it has been decided the tax deferral cannot be realised and it has been revalued this quarter.
R U fo RealZ?? :cool:

[Wraith]

It's not a grim outlook for the GM cars, the main component of that loss is due to other financial reasons, not that the cars arn't selling or doing badly ;)