Paying users zone. Data is covered by hidden.

  • Get 1 month access to General Motors Co. for $15.99, or

  • get full access to entire website for at least 3 months from $49.99.


We accept:

Visa Mastercard American Express Maestro Discover JCB PayPal Apple Pay Google Pay
Verified by Visa MasterCard SecureCode American Express SafeKey

Microsoft Excel LibreOffice Calc

General Motors Co. (GM)


Analysis of Bad Debts

Difficulty: Advanced

Allowance for doubtful accounts receivable (bad debts) is a contra account which reduce the balance of the company’s gross accounts receivable.The relationship between the allowance and the balance in receivables should be relatively constant unless there is a change in the economy overall or a change in customer base.


Receivables Accounting Policy

Accounts and Notes Receivable

Accounts and notes receivable primarily consists of amounts that are due and payable from General Motors’ customers for the sale of vehicles, parts, and accessories. General Motors evaluates the collectability of receivables each reporting period and records an allowance for doubtful accounts representing the estimate of probable losses. Additions to the allowance are charged to bad debt expense reported in Automotive and other selling, general and administrative expense and were insignificant in the years ended December 31, 2018, 2017 and 2016.

GM Financial Receivables

Finance receivables are carried at amortized cost, net of allowance for loan losses. GM Financial uses forecasting models to determine the collective allowance for loan losses based on factors including historical delinquency migration to loss, probability of default and loss given default. The loss confirmation period is a key assumption within the models and represents the average amount of time from when a loss event first occurs to when the receivable is charged off. GM Financial also considers an evaluation of overall portfolio credit quality based on various indicators.

Retail finance receivables that become classified as troubled debt restructurings (TDRs) are separately assessed for impairment. A specific allowance is estimated based on the present value of the expected future cash flows of the receivables discounted at the original weighted average effective interest rate. Finance charge income from loans classified as TDRs is accounted for in the same manner as other accruing loans. Cash collections on these loans are allocated according to the same payment hierarchy methodology applied to loans that are not classified as TDRs.

Retail finance receivables are generally charged off in the month in which the account becomes 120 days contractually delinquent if GM Financial has not yet recorded a repossession charge-off. A repossession charge-off generally represents the difference between the estimated net sales proceeds and the unpaid balance of the contract, including accrued interest.

Source: 10-K (filing date: 2019-02-06).


Allowance for Doubtful Accounts Receivable

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Allowance for doubtful accounts and notes receivable hidden hidden hidden hidden hidden
Accounts and notes receivable, gross hidden hidden hidden hidden hidden
Ratio
Allowance as a percentage of accounts and notes receivable, gross1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-07), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

2018 Calculations

1 Allowance as a percentage of accounts and notes receivable, gross = 100 × Allowance for doubtful accounts and notes receivable ÷ Accounts and notes receivable, gross
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Allowance as a percentage of accounts and notes receivable, gross Allowance for doubtful accounts divided by the gross accounts receivable. General Motors Co.’s allowance as a percentage of accounts and notes receivable, gross increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level.

Allowance for Credit Losses

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Allowance for loan losses hidden hidden hidden hidden hidden
GM Financial receivables hidden hidden hidden hidden hidden
Ratio
Allowance as a percentage of gM Financial receivables1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-07), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).

2018 Calculations

1 Allowance as a percentage of gM Financial receivables = 100 × Allowance for loan losses ÷ GM Financial receivables
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Allowance as a percentage of gM Financial receivables Allowance for credit losses divided by the gross financing receivable. General Motors Co.’s allowance as a percentage of gM Financial receivables increased from 2016 to 2017 but then declined significantly from 2017 to 2018.