General Motors 2010 Annual Report Download - page 149

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Market, which represents selling price less cost to sell, considers general market and economic conditions, periodic reviews of
current profitability of vehicles, and the effect of current incentive offers at the balance sheet date. Market for off-lease and other
vehicles is current auction sales proceeds less disposal and warranty costs. Productive material, work in process, supplies and service
parts are reviewed to determine if inventory quantities are in excess of forecasted usage, or if they have become obsolete.
Advertising
The following table summarizes advertising expenditures, which are expensed as incurred (dollars in millions):
Successor Predecessor
Year Ended
December 31, 2010
July 10, 2009
Through
December 31, 2009
January 1, 2009
Through
July 9, 2009
Year Ended
December 31, 2008
Advertising expense ................................. $4,259 $2,110 $1,471 $5,303
Research and Development Expenditures
Automotive
The following table summarizes research and development expenditures, which are expensed as incurred (dollars in millions):
Successor Predecessor
Year Ended
December 31, 2010
July 10, 2009
Through
December 31, 2009
January 1, 2009
Through
July 9, 2009
Year Ended
December 31, 2008
Research and development expense .................... $6,962 $3,034 $3,017 $8,012
Property, net
Property, plants and equipment, including internal use software, is recorded at cost. Major improvements that extend the useful life
or add functionality of property are capitalized. Expenditures for repairs and maintenance are charged to expense as incurred. We
depreciate all depreciable property using the straight-line method. Leasehold improvements are amortized over the period of lease or
the life of the asset, whichever is shorter. For depreciable property placed in service before January 2001, Old GM used accelerated
depreciation methods. For depreciable property placed in service after January 2001, Old GM used the straight-line method. Upon
retirement or disposition of property, plants and equipment, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is recorded in earnings. Impairment charges related to property are recorded in Automotive
cost of sales or GM Financial operating expenses and other. Refer to Notes 12 and 26 for additional information on property and
impairments.
Special Tools
Automotive
Special tools represent product-specific powertrain and non-powertrain related tools, dies, molds and other items used in the vehicle
manufacturing process. Expenditures for special tools are recorded at cost and are capitalized. In connection with our application of
fresh-start reporting, we began amortizing all non-powertrain special tools using an accelerated amortization method. We amortize
powertrain special tools over their estimated useful lives using the straight-line method. Old GM amortized all special tools using the
straight-line method over their estimated useful lives. Refer to Note 12 for additional information on special tools.
General Motors Company 2010 Annual Report 147