General Motors 2011 Annual Report Download - page 83

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
GM Financial
The assets and liabilities of GM Financial, our automotive finance operations, are presented on a non-classified basis. The amounts
presented for GM Financial have been adjusted to include the effect of our tax attributes on GM Financial’s deferred tax positions and
provision for income taxes since the date of acquisition, which are not applicable to GM Financial on a stand-alone basis, and to
eliminate the effect of transactions between GM Financial and the other members of the consolidated group. Accordingly, the
amounts presented will differ from those presented by GM Financial on a stand-alone basis.
Change in Presentation of Financial Statements
We changed the presentation of our consolidated balance sheet, consolidated statement of cash flows and certain footnotes to
combine line items which were either of a related nature or not individually material. We have made corresponding reclassifications to
the comparable information for all periods presented.
In the year ended December 31, 2011 we have recorded foreign currency exchange gains and losses on debt as non-operating items.
This is a change from prior period presentations in which foreign currency exchange gains and losses on debt were recorded in
Automotive cost of sales. We have reclassified all the successor prior periods to conform to our current presentation. The effects of
this reclassification decreased Automotive cost of sales and Interest income and other non-operating income, net by $24 million for
the year ended December 31, 2010 and $65 million for the period July 10, 2009 through December 31, 2009.
Venezuelan Exchange Regulations
Our Venezuelan subsidiaries changed their functional currency from Bolivar Fuerte (BsF), the local currency, to the U.S. Dollar,
our reporting currency, on January 1, 2010 because of the hyperinflationary status of the Venezuelan economy. In January 2010 there
was a devaluation of the Venezuelan currency and establishment of dual fixed exchange rates, an essential rate and a nonessential rate.
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. The restrictions on the foreign currency exchange market affect our Venezuelan subsidiaries’ ability to pay non-BsF
denominated obligations that do not qualify to be processed by the Venezuela currency exchange agency at the official exchange rates
as well as our ability to fully benefit from these operations.
Effective January 1, 2011 the BsF was further devalued and the essential rate was eliminated. The devaluation has affected results
of operations in 2011 because our Venezuelan subsidiaries no longer realize gains that result from favorable foreign currency
exchanges processed by the Venezuela currency exchange agency at the essential rate.
The aggregate net assets of our Venezuelan subsidiaries at December 31, 2011 and 2010 were $438 million and $337 million. At
December 31, 2011 and 2010 other consolidated entities have receivables from our Venezuelan subsidiaries of $380 million and $283
million. The total amounts pending government approval for settlement at December 31, 2011 and 2010 were BsF 2.3 billion
(equivalent to $535 million) and BsF 1.9 billion (equivalent to $432 million), for which some requests have been pending from 2007.
Note 3. 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. The accounting policies which follow are utilized by our
automotive and automotive financing operations, unless otherwise indicated.
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