General Motors 2010 Annual Report Download - page 146

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
to the official devaluation of the Venezuelan currency and establishment of the dual fixed exchange rates (essential rate of BsF 2.60 to
$1.00 and nonessential rate of BsF 4.30 to $1.00) in January 2010, we remeasured the BsF denominated monetary assets and liabilities
held by our Venezuelan subsidiaries at the nonessential rate of 4.30 BsF to $1.00. The remeasurement resulted in a charge of
$25 million recorded in Automotive cost of sales in the year ended December 31, 2010. In the year ended December 31, 2010 all BsF
denominated transactions have been remeasured at the nonessential rate of 4.30 BsF to $1.00.
In June 2010 the Venezuelan government introduced additional foreign currency exchange control regulations, which imposed
restrictions on the use of the parallel foreign currency exchange market, thereby making it more difficult to convert BsF to U.S.
Dollars. We periodically accessed the parallel exchange market, which historically enabled entities to obtain foreign currency for
transactions that could not be processed by the Commission for the Administration of Currency Exchange (CADIVI). The restrictions
on the foreign currency exchange market could affect our Venezuelan subsidiaries’ ability to pay non-BsF denominated obligations
that do not qualify to be processed by CADIVI at the official exchange rates as well as our ability to benefit from those operations.
In December 2010 another official devaluation of the Venezuelan currency was announced that eliminated the essential rate
effective January 1, 2011. The devaluation did not have an effect on the 2010 consolidated financial statements, however, it will affect
results of operations in subsequent years because our Venezuelan subsidiaries will no longer realize gains that result from favorable
foreign currency exchanges processed by CADIVI at the essential rate.
The following tables provide financial information for our Venezuelan subsidiaries at and for the year ended December 31, 2010,
which include amounts receivable from and payable to, and transactions with, affiliated entities (dollars in millions):
Successor
December 31, 2010
Total automotive assets (a) ....................................................................... $1,322
Total automotive liabilities (b) .................................................................... $ 985
Successor
Year Ended
December 31, 2010
Total net sales and revenue ....................................................................... $1,139
Net income (loss) attributable to stockholders (c) ..................................................... $ 320
(a) Includes BsF denominated and non-BsF denominated monetary assets of $393 million and $527 million.
(b) Includes BsF denominated and non-BsF denominated monetary liabilities of $661 million and $324 million.
(c) Includes a gain of $119 million related to the devaluation of the BsF in January 2010 and a gain of $273 million in the year ended
December 31, 2010 due to favorable foreign currency exchanges that were processed by CADIVI at the essential rate. The $119
million gain on the devaluation was offset by a $144 million loss recorded by U.S. entities on BsF denominated assets, which is
not included in the Net income (loss) attributable to stockholders reported above.
The total amount pending government approval for settlement at December 31, 2010 is BsF 1.9 billion (equivalent to $432 million),
for which some requests have been pending from 2007. The amount includes payables to affiliated entities of $263 million, which
includes dividends payable of $144 million.
Note 4. Significant Accounting Policies
In connection with our application of fresh-start reporting, we established a set of accounting policies which, unless otherwise
indicated, utilized the accounting policies of our predecessor entity, Old GM.
144 General Motors Company 2010 Annual Report