How GM made $30 billion appear out of thin air - Camaro5 Chevy Camaro Forum / Camaro ZL1, SS and V6 Forums

1bad65 · 09-09-2010, 01:30 PM

This is absolutely amazing. It should serve as a warning for any of you considering purchasing GM stock when they have their IPO.

"It will be a long time before General Motors Co. can shake the stigma of being called Government Motors. Here’s another nickname for the bailed-out automaker: Goodwill Motors.

Sometimes the wackiest accounting results are the ones driven by the accounting rules themselves. Consider this: How could it be that one of GM’s most valuable assets, listed at $30.2 billion, is the intangible asset known as goodwill, when it’s been only a little more than a year since the company emerged from Chapter 11 bankruptcy protection?

That’s the amount GM said its goodwill was worth on the June 30 balance sheet it filed last month as part of the registration statement for its planned initial public offering. By comparison, GM said its total equity was $23.9 billion. So without the goodwill, which isn’t saleable, the company’s equity would be negative. This is hardly a sign of robust financial strength.

GM listed its goodwill at zero a year earlier. It’s as if a $30.2 billion asset suddenly materialized out of thin air. In the upside-down world that is GM’s balance sheet, that’s exactly what happened.

Indeed, the company’s goodwill supposedly is worth more than its property, plant and equipment, which GM listed at $18.1 billion. The amount is about eight times the $3.5 billion GM is paying to buy AmeriCredit Corp., the subprime auto lender. Another twist: GM said its goodwill would have been worth less had its creditworthiness been better. Talk about a head- scratcher."

Entire article:
http://www.bloomberg.com/news/2010-0...than-weil.html

2010 2-Tone · 09-09-2010, 01:36 PM

Quit crying.

If it was Ford you wouldn't have said a word!!!! It is business and it happens everyday everywhere!!! Have a good day CAMARO HATER!!!!

Steve Dallas · 09-09-2010, 01:40 PM

Doesn't change the fact that no matter what, Ford still sucks...

bigearl · 09-09-2010, 01:42 PM

ummm, I'm trying to find 'goodwill' on the balance sheets of any company I do business for....

I don't think that quite happens everyday, everywhere.

formare · 09-09-2010, 01:43 PM

Schooling - so sit down and take notes... Goodwill is not "people feel good about us". Goodwill is a dollar amount that is equal to the difference between the sale price and the asset value.

You will never ever buy a functioning company for the asset value. You will pay asset plus revenue profitability over time. In this case i suspect the purchase price is based on the determined ipo value and the book price is likely asset value. The goodwill is the difference between those two.

You would only list goodwill during the reporting period for which you are selling your company.

bigearl · 09-09-2010, 01:47 PM

Quote:

Originally Posted by formare

Schooling - so sit down and take notes... Goodwill is not "people feel good about us". Goodwill is a dollar amount that is equal to the difference between the sale price and the asset value.

You will never ever buy a functioning company for the asset value. You will pay asset plus revenue profitability over time. In this case i suspect the purchase price is based on the determined ipo value and the book price is likely asset value. The goodwill is the difference between those two.

You would only list goodwill during the reporting period for which you are selling your company.

I thought it was for the buyer. One company buys another and the difference between the price and the total assets was goodwill?

Not the selling company in an IPO....maybe I'm wrong though, been a while.

formare · 09-09-2010, 01:48 PM

Oh and PS - ford should be recognized with a congressional medal and a holiday named after them... They saw the downturn did the correct course of action made the tough choices and managed a better business. They did better than any other us auto manufacturer. Im not a hater - I'm just stating fact.

Waco · 09-09-2010, 01:51 PM

Quote:

Originally Posted by 1bad65

This is absolutely amazing. It should serve as a warning for any of you considering purchasing GM stock when they have their IPO.

"It will be a long time before General Motors Co. can shake the stigma of being called Government Motors. Here’s another nickname for the bailed-out automaker: Goodwill Motors.

Sometimes the wackiest accounting results are the ones driven by the accounting rules themselves. Consider this: How could it be that one of GM’s most valuable assets, listed at $30.2 billion, is the intangible asset known as goodwill, when it’s been only a little more than a year since the company emerged from Chapter 11 bankruptcy protection?

That’s the amount GM said its goodwill was worth on the June 30 balance sheet it filed last month as part of the registration statement for its planned initial public offering. By comparison, GM said its total equity was $23.9 billion. So without the goodwill, which isn’t saleable, the company’s equity would be negative. This is hardly a sign of robust financial strength.

GM listed its goodwill at zero a year earlier. It’s as if a $30.2 billion asset suddenly materialized out of thin air. In the upside-down world that is GM’s balance sheet, that’s exactly what happened.

Indeed, the company’s goodwill supposedly is worth more than its property, plant and equipment, which GM listed at $18.1 billion. The amount is about eight times the $3.5 billion GM is paying to buy AmeriCredit Corp., the subprime auto lender. Another twist: GM said its goodwill would have been worth less had its creditworthiness been better. Talk about a head- scratcher."

Entire article:
http://www.bloomberg.com/news/2010-0...than-weil.html

:troll:

brandotron · 09-09-2010, 01:54 PM

ViperTomcat · 09-09-2010, 02:28 PM

Quote:

Originally Posted by 2010 2-Tone

Quit crying.

If it was Ford you wouldn't have said a word!!!! It is business and it happens everyday everywhere!!! Have a good day CAMARO HATER!!!!

It doesnt happen every day, everywhere. 1bad65 isnt a "Camaro hater", trust me.

This is a fairly legitimate topic of conversation, and doesnt need to turn nasty.

2ndgenz28 · 09-09-2010, 02:40 PM

Quote:

Originally Posted by 2010 2-Tone

Quit crying.

If it was Ford you wouldn't have said a word!!!! It is business and it happens everyday everywhere!!! Have a good day CAMARO HATER!!!!

DITTO

Id rather be called Government Motors then UAW Motors, only reason Furd got by is by borrowing billions from the UAW AKA mob. GM has 4 legs to stand on with the Gov and cna do what they want, Furd has to bend to the will of the UAW on its 3 legged chair or risk falling over.

RedJewel2SS · 09-09-2010, 02:44 PM

you have no life if your a mustang fan actively posting on a camaro forum...

that goes for all of the LOSERS with mustang avatars here!

meanmike · 09-09-2010, 02:46 PM

Quote:

Originally Posted by RedJewel2SS

you have no life if your a mustang fan actively posting on a camaro forum...

that goes for all of the LOSERS with mustang avatars here!

You want some cheese with that?

*GTAHVIT* · 09-09-2010, 02:47 PM

Closed,

If someone else would like to repost this article in such a way that it fosters mature discussion, feel free.

09-09-2010, 01:30 PM	#1
1bad65 Banned Drives: 2007 Mustang GT Join Date: Jul 2009 Location: Austin Posts: 1,148	How GM made $30 billion appear out of thin air This is absolutely amazing. It should serve as a warning for any of you considering purchasing GM stock when they have their IPO. "It will be a long time before General Motors Co. can shake the stigma of being called Government Motors. Here’s another nickname for the bailed-out automaker: Goodwill Motors. Sometimes the wackiest accounting results are the ones driven by the accounting rules themselves. Consider this: How could it be that one of GM’s most valuable assets, listed at $30.2 billion, is the intangible asset known as goodwill, when it’s been only a little more than a year since the company emerged from Chapter 11 bankruptcy protection? That’s the amount GM said its goodwill was worth on the June 30 balance sheet it filed last month as part of the registration statement for its planned initial public offering. By comparison, GM said its total equity was $23.9 billion. So without the goodwill, which isn’t saleable, the company’s equity would be negative. This is hardly a sign of robust financial strength. GM listed its goodwill at zero a year earlier. It’s as if a $30.2 billion asset suddenly materialized out of thin air. In the upside-down world that is GM’s balance sheet, that’s exactly what happened. Indeed, the company’s goodwill supposedly is worth more than its property, plant and equipment, which GM listed at $18.1 billion. The amount is about eight times the $3.5 billion GM is paying to buy AmeriCredit Corp., the subprime auto lender. Another twist: GM said its goodwill would have been worth less had its creditworthiness been better. Talk about a head- scratcher." Entire article: http://www.bloomberg.com/news/2010-0...than-weil.html

09-09-2010, 01:40 PM	#3
Steve Dallas Commits weekly crime Drives: 2017 Camaro 1LT Join Date: Nov 2009 Location: Camano Island, WA Posts: 9,513 View My Garage	Doesn't change the fact that no matter what, Ford still sucks... __________________ 2017 Camaro 1LT - Blue Barchetta IV I fire up the willing engine, responding with a roar. Tires spitting gravel I commit my weekly crime.

09-09-2010, 01:42 PM	#4
bigearl Drives: 10 Camaro 2lt Join Date: Apr 2010 Location: Napa Posts: 553	ummm, I'm trying to find 'goodwill' on the balance sheets of any company I do business for.... I don't think that quite happens everyday, everywhere. __________________ ----------- Sharks have a week dedicated to me.

09-09-2010, 01:43 PM	#5
formare The Milano Drives: 2017 Firefly ShipWorks Join Date: Jun 2010 Location: Chicagoland (Crown Point, IN) Posts: 1,877 View My Garage	Schooling - so sit down and take notes... Goodwill is not "people feel good about us". Goodwill is a dollar amount that is equal to the difference between the sale price and the asset value. You will never ever buy a functioning company for the asset value. You will pay asset plus revenue profitability over time. In this case i suspect the purchase price is based on the determined ipo value and the book price is likely asset value. The goodwill is the difference between those two. You would only list goodwill during the reporting period for which you are selling your company. __________________ My first Love. She was called "Miss Carriage" (still cry when I think about her) 383, Muncie 4 speed, custom linkage mated to hurst short throw shifter.

09-09-2010, 01:48 PM	#7
formare The Milano Drives: 2017 Firefly ShipWorks Join Date: Jun 2010 Location: Chicagoland (Crown Point, IN) Posts: 1,877 View My Garage	Oh and PS - ford should be recognized with a congressional medal and a holiday named after them... They saw the downturn did the correct course of action made the tough choices and managed a better business. They did better than any other us auto manufacturer. Im not a hater - I'm just stating fact. __________________ My first Love. She was called "Miss Carriage" (still cry when I think about her) 383, Muncie 4 speed, custom linkage mated to hurst short throw shifter.

09-09-2010, 01:36 PM	#2
2010 2-Tone Drives: 2010 RY 2SS with Custom Stripes Join Date: Mar 2009 Location: Jennings, La. Posts: 2,220 View My Garage	Quit crying. If it was Ford you wouldn't have said a word!!!! It is business and it happens everyday everywhere!!! Have a good day CAMARO HATER!!!!

09-09-2010, 01:54 PM	#9
brandotron I am the internets. Drives: dangerously Join Date: May 2009 Location: Redondo Beach, CA Posts: 12,571 View My Garage	__________________

09-09-2010, 02:44 PM	#12
RedJewel2SS 12.23s@113mph Drives: 2SS/RS, A6, just a few bolt ons Join Date: Jul 2009 Location: Houston, TX Posts: 1,197	you have no life if your a mustang fan actively posting on a camaro forum... that goes for all of the LOSERS with mustang avatars here! __________________ RIP Cammie 7/15/2009 - 4/1/2011

09-09-2010, 02:47 PM	#14
GTAHVIT Blessed Drives: 2013 Sonic RS MT Join Date: Dec 2007 Location: Saint Augustine FL Posts: 28,444 View My Garage	Closed, If someone else would like to repost this article in such a way that it fosters mature discussion, feel free. __________________ Click image to see build thread. PQ - "the love of cars. It's a boys first step toward manhood and a mans last hold on boyhood." Fbodfather - "We do not want to use the Z28 moniker on a car that does not deserve this hallowed name." The_Blur - "Let's not confuse competitors with equals."

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
Supercharger / Turbocharger Results (INFO) Thread	radz28	Forced Induction - V8	273	08-15-2023 04:44 PM
RAM AIR MYTH OR TRUTH	JANNETTYRACING	Camaro V8 LS3 / L99 Engine, Exhaust, and Bolt-Ons	30	06-18-2010 11:41 PM
Air Intake Information for GM's 3.6L V6	Airaid Filters	Camaro V6 LLT Engine, Exhaust, and Bolt-Ons	91	10-27-2009 07:26 AM
Going Green, Means going Made In China	One Mean Chevy	Off-topic Discussions	0	04-26-2009 12:04 AM
Press Release: GM to Bolster Liquidity by $15 Billion through 2009	Mr. Wyndham	General Automotive + Other Cars Discussion	6	07-17-2008 12:42 PM