GM's $30B Goodwill Write-up Explained

[a_Username]

Originally Posted by Russo

or just make it illegal like God and politics.. hey, at least they let members post pics of their naked wives on a family car forum..

Yeah he went there.

[Georgie]

Originally Posted by SuperFly03

I'll just side step the Enron reference...

Anyways, in this case, Goodwill does not relate to the intangibles you mentioned (patents, trademarks, etc). Those are actually captured in the $15.9B that HHR is asking about above. The goodwill in this case is the most fungible thing you can imagine. It really has no basis other than to make the equation balance.

Yes, that is what i meant, Goodwill relates to intangibles that CANNOT be capitalized UNLIKE (better word) Patents and Copyrights

the question is, how was the Goodwill created in this case and that is what is confusing me. basically as i understand it, the Govt GAVE GM equity, which created the Goodwill (Amount above FMV of Net Identifiable Assets) which would mean that the govt did in fact purchase GM...

[SuperFly03]

Originally Posted by Georgie

Yes, that is what i meant, Goodwill relates to intangibles that CANNOT be capitalized UNLIKE (better word) Patents and Copyrights

the question is, how was the Goodwill created in this case and that is what is confusing me. basically as i understand it, the Govt GAVE GM equity, which created the Goodwill (Amount above FMV of Net Identifiable Assets) which would mean that the govt did in fact purchase GM...

The government gave old Gm money. When the new GM was formed whatever equity the government had got wiped out. The shares were reissued for the new GM again at a fixed price (really for free) and the associated value was booked to additional paid in capital ( what was in excess of the par value). The equity transactions are described in one of the two filings I linked.

I camt figure out which because I'm on my cell again.

The fact that goodwill arose doesn't mean the government purchased GM... but it does hint at it. From an accounting and qualitative perspective they do.

The goodwill asset was purely a result of fresh start accounting.

[Georgie]

thx... real tricky stuff--luckily this paticular example won't be on FAR, not that it needs to be anymore difficult

[SuperFly03]

Originally Posted by Georgie

thx... real tricky stuff--luckily this paticular example won't be on FAR, not that it needs to be anymore difficult

FAR is easy shit. Real basic accounting.

[Georgie]

well i hope so. i'm taking Becker review right now. FAR is my first exam. i did well in school but the exam is where it counts.