General Motors 2012 Annual Report Download - page 79

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Change in Presentation of Financial Statements
In 2012 we changed the presentation of our consolidated balance sheet, consolidated statements of cash flows and certain notes to
the consolidated financial statements to classify the assets and liabilities of GM Financial as current or non-current and 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.
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 from that date forward 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, 2012 and 2011 were $786 million and $438 million. At
December 31, 2012 and 2011 other consolidated entities have receivables from our Venezuelan subsidiaries of $379 million and $380
million. The total amounts pending government approval for settlement at December 31, 2012 and 2011 were BsF 2.2 billion
(equivalent to $523 million) and BsF 2.3 billion (equivalent to $535 million), for which some requests have been pending from 2007.
In February 2013 the Venezuelan government announced that the official fixed exchange rate of BsF 4.3 to $1.00 would be changed
to BsF 6.3 to $1.00. The devaluation did not have an effect on the 2012 consolidated financial statements; however, the devaluation
will require remeasurement of our Venezuelan subsidiaries’ non-U.S. dollar denominated monetary assets and liabilities in the three
months ending March 31, 2013. The devaluation effective date is February 13, 2013 and is expected to result in a charge in the range
of $150 million to $200 million.
Note 3. Significant Accounting Policies
The accounting policies which follow are utilized by our automotive and automotive financing operations, unless otherwise
indicated.
Revenue Recognition
Automotive
Automotive sales and revenue are primarily composed of revenue generated from the sale of vehicles. Vehicle sales are recorded
when title and all risks and rewards of ownership have passed to our customers. For the majority of our automotive sales, this occurs
when a vehicle is released to the carrier responsible for transporting to a dealer and when collectability is reasonably assured. Vehicle
sales are recorded when the vehicle is delivered to the dealer in most remaining cases. Provisions for recurring dealer and customer
sales and leasing incentives, consisting of allowances and rebates, are recorded as reductions to Automotive sales and revenue at the
General Motors Company 2012 ANNUAL REPORT76