I hate to burst some people's bubbles but there is a reason why the law makes companies include these so called "paper" and "non-operational" losses in their financial reports.
The reason they have to is because they are REAL losses of wealth.
You don't just lose money when it's hard cash. When they come and take your car and house away you also lose the equity in them, even though it wasn't hard cash.
The $2 Billion loss from vehicle leases may not be cash, but it was the loss of an asset which was that coming off of lease GM thought they would have had $2 Billion dollars more in the value of those vehicles that would have then been sold and that asset converted into hard cash. So that's $2 Billion in future hard cash that GM has lost. Is it GM's fault that suddenly SUV's and Trucks are worth far less due to $4 gas? Yes.
GM decided the bulk of their sales would be SUV's and Trucks whereas Toyota decided the bulk of it's sales, and thus the vehicle lease residuals it was exposed to, would be more frugal cars that have not suffered devaluation due to $4 gas. So if you make a strategic decision and it pays off then you can rightly claim you made a good decision, but when you make a business forecast and decide badly, then it is your fault.
When they wrote off $30+ Billion in tax offsets, that was $30+ Billion of real hard cash that GM would not have had to pay the IRS in tax on profits had they have made any.
OK you can argue they lost nothing as they had no profit to tax and thus nothing to offset, but the point is that HAD they have been managed to make money, as they are meant to, then that is $30 Billion that should by now be in GM’s bank account and going into better future product. I'm sure Toyota is and has been able to pocket all it's legitimate tax offsets and thus convert them into real hard cash. So that 'paper' loss by GM gives Toyota’s war chest $30 Billion further advantage over them. These things are real, with real consequences.
This whole parsing of results saying "no the real loss is a lot less" is bullcrap. These are ALL real losses. That's why GAAP makes you legally have to declare them to the public.
