General Motors 2014 Annual Report Download - page 77

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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
is recorded based on the amount by which the carrying amount exceeds fair value. Product-specific long-lived asset groups are tested
for impairment at the platform or vehicle line level and consider their geographical location. Non-product specific long-lived assets
are tested for impairment on a reporting unit basis in GMNA and GME and tested at or within our various reporting units within our
GMIO, GMSA and GM Financial segments. Fair value is determined using either the market or sales comparison approach, cost
approach or anticipated cash flows discounted at a rate commensurate with the risk involved. Long-lived assets to be disposed of other
than by sale are considered held for use until disposition. Product-specific assets may become impaired as a result of declines in
profitability due to changes in volume, pricing or costs.
Pension and OPEB 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: (1) the average period to full eligibility; (2) the average
life expectancy of the plan participants; or (3) the period to the plan’s termination date for a plan which provides legal services.
An expected return on plan asset methodology is utilized to calculate future pension expense for certain significant funded benefit
plans. A market-related value of plan assets methodology is also utilized that averages gains and losses on the plan assets over a
period of years to determine future pension expense. The methodology recognizes 60% of the difference between the fair value of
assets and the expected calculated value in the first year and 10% of that difference over each of the next four years.
The discount rate assumption is established for each of the retirement-related benefit plans at their respective measurement dates. In
the U.S. we use a cash flow matching approach that uses projected cash flows matched to spot rates along a high quality corporate
yield curve to determine the present value of cash flows to calculate a single equivalent discount rate.
The benefit obligation for pension plans in Canada, the United Kingdom and Germany represents 92% of the non-U.S. pension
benefit obligation at December 31, 2014. The discount rates for plans in Canada, the United Kingdom and Germany are determined
using a cash flow matching approach similar to the U.S. approach.
Plan Asset Valuation
Due to the lack of timely available market information for certain investments in the asset classes described below as well as the
inherent uncertainty of valuation, reported fair values may differ from fair values that would have been used had timely available
market information been available.
77