btm
8th November 2007, 11:00 AM
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.
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.