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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
equipment. 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.
The amortization of the assets under capital leases is included in depreciation expense. Upon retirement or disposition of property,
plant 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, Automotive selling, general
and administrative expense or GM Financial operating and other expenses.
Special Tools
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. We amortize all non-powertrain special
tools over their estimated useful lives using an accelerated amortization method. We amortize powertrain special tools over their
estimated useful lives using the straight-line method. Impairment charges related to special tools are recorded in Automotive cost of
sales.
Goodwill
Goodwill arises from the application of fresh-start reporting and acquisitions accounted for as business combinations. Goodwill is
tested for impairment for all reporting units on an annual basis during the fourth quarter, or more frequently if events occur or
circumstances change that would warrant such a review. When the fair value of a reporting unit falls below its carrying amount an
impairment charge is recorded for the amount, if any, by which the carrying amount of goodwill exceeds its implied fair value. Fair
values of reporting units are established using a discounted cash flow method. Where available and as appropriate, comparative
market multiples and the quoted market price for our common stock are used to corroborate the results of the discounted cash flow
method. Our reporting units are GMNA and GME and various reporting units within the GMIO, GMSA and GM Financial segments.
Due to the integrated nature of our manufacturing operations and the sharing of assets, other resources and vehicle platforms among
brands within GMNA and GME and because financial information by brand or country is not discrete below the operating segment
level, GMNA and GME do not contain reporting units below the operating segment level. GMIO, GMSA and GM Financial are less
integrated given the lack of regional trade pacts and other unique geographical differences and thus contain separate reporting units
below the operating segment level. Goodwill would be reassigned on a relative-fair-value basis to a portion of a reporting unit to be
disposed of or upon the reorganization of the composition of one or more of our reporting units, unless the reporting unit was never
integrated.
Intangible Assets, net
Intangible assets, excluding Goodwill, primarily include brand names (including defensive intangibles associated with discontinued
brands), technology and intellectual property, customer relationships and dealer networks.
Intangible assets are amortized on a straight-line or an accelerated method of amortization over their estimated useful lives. An
accelerated amortization method reflecting the pattern in which the asset will be consumed is utilized if that pattern can be reliably
determined. We consider the period of expected cash flows and underlying data used to measure the fair value of the intangible assets
when selecting a useful life. Impairment charges related to intangible assets are recorded in Automotive selling, general and
administrative expense or Automotive cost of sales.
Amortization of developed technology and intellectual property is recorded in Automotive cost of sales. Amortization of brand
names, customer relationships and our dealer networks is recorded in Automotive selling, general and administrative expense or GM
Financial operating and other expenses.
Valuation of Long-Lived Assets
The carrying amount of long-lived assets and finite-lived intangible assets to be held and used in the business are evaluated for
impairment when events and circumstances warrant. If the carrying amount of a long-lived asset group is considered impaired, a loss
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2013 ANNUAL REPORT