General Motors 2010 Annual Report Download - page 156

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
• Taxable income in prior carryback years; and
• Tax-planning strategies.
The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and
negative evidence factors, including but not limited to:
• Nature, frequency, and severity of recent losses;
• Duration of statutory carryforward periods;
• Historical experience with tax attributes expiring unused; and
• Near- and medium-term financial outlook;
Concluding a valuation allowance is not required is difficult when there is significant negative evidence that is objective and
verifiable, such as cumulative losses in recent years. We utilize and Old GM utilized a rolling three years of actual and current year
anticipated results as the primary measure of cumulative losses in recent years, as adjusted for non-recurring matters.
Income tax expense (benefit) for the year is allocated between continuing operations and other categories of income such as
Discontinued operations or other comprehensive income (loss). In periods in which there is a pre-tax loss from continuing operations
and pre-tax income in another income category, the tax benefit allocated to continuing operations is determined by taking into account
the pre-tax income of other categories.
We record interest and penalties on uncertain tax positions in Income tax expense (benefit). Old GM recorded interest income on
uncertain tax positions in Interest income and other non-operating income, net, interest expense in Automotive interest expense and
penalties in Automotive selling, general and administrative expense.
Pension and Other Postretirement Plans
Attribution, Methods and Assumptions
The cost of benefits provided by defined benefit pension plans is recorded in the period employees provide service. The cost of
pension plan amendments that provide for benefits already earned by plan participants is amortized over the expected period of
benefit which may be: (1) the duration of the applicable collective bargaining agreement specific to the plan; (2) expected future
working lifetime; or (3) the life expectancy of the plan participants.
The cost of medical, dental, legal service and life insurance benefits provided through postretirement benefit plans is recorded in
the period employees provide service. The cost of postretirement plan amendments that provide for benefits already earned by plan
participants is amortized over the expected period of benefit which may be the average period to full eligibility or the average life
expectancy of the plan participants.
U.S. salaried retiree medical plan amendments are amortized over the period to full eligibility and actuarial gains and losses are
amortized over the average remaining years of future service.
Actuarial (gains) losses and new prior service costs (credits) for the U.S. hourly healthcare plans are amortized over a time period
corresponding with the average life expectancy of the plan participants.
154 General Motors Company 2010 Annual Report