General Motors 2015 Annual Report Download - page 65

Table of Contents
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Intangible assets, excluding goodwill, primarily include brand names, 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 interest, operating and other expenses.
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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 and non-product specific long-lived assets are separately tested for impairment
on a reporting unit basis in GMNA and GME and tested at or within our various reporting units in GMIO, GMSA and GM Financial. 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 vehicle profitability due to changes in volume, pricing or costs.
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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; or (2) the average life expectancy of the plan participants.
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 91% of the non-U.S. pension benefit obligation at
December 31, 2015. 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.
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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.
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