General Motors 2013 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2013 General Motors annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 130

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Revenue Recognition
Automotive
Automotive net 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 net sales and
revenue at the time of vehicle sales. All other incentives, allowances and rebates related to vehicles previously sold are recorded as
reductions to Automotive net sales and revenue when announced.
Vehicle sales to daily rental car companies with guaranteed repurchase obligations are accounted for as operating leases. Estimated
lease revenue is recorded ratably over the estimated term of the lease based on the difference between net sales proceeds and the
guaranteed repurchase amount. The difference between the cost of the vehicle and estimated residual value is depreciated on a
straight-line basis over the estimated term of the lease.
Automotive Financing — GM Financial
Finance income earned on receivables is recognized using the effective interest method for consumer financing receivables and
accrual method for commercial financing receivables. Fees and commissions (including incentive payments) received and direct costs
of originating loans are deferred and amortized over the term of the related finance receivables using the effective interest method and
are removed from the consolidated balance sheets when the related finance receivables are sold, charged off or paid in full. Accrual of
finance charge income is generally suspended on accounts that are more than 60 days delinquent, accounts in bankruptcy and accounts
in repossession. Payments received on nonaccrual loans are first applied to any fees due, then to any interest due and then any
remaining amounts are recorded to principal. Interest accrual generally resumes once an account has received payments bringing the
delinquency to less than 60 days past due.
Income from operating lease assets, which includes lease origination fees, net of lease origination costs and incentives, is recorded
as operating lease revenue on a straight-line basis over the term of the lease agreement.
Advertising and Promotion Expenditures
Advertising and promotion expenditures, which are expensed as incurred, were $5.5 billion, $5.4 billion and $5.2 billion in the
years ended December 31, 2013, 2012 and 2011.
Research and Development Expenditures
Research and development expenditures, which are expensed as incurred, were $7.2 billion, $7.4 billion and $8.1 billion in the
years ended December, 31 2013, 2012 and 2011.
Cash Equivalents
Cash equivalents are defined as short-term, highly-liquid investments with original maturities of 90 days or less.
60
2013 ANNUAL REPORT