Nobody that I have seen or read has picked up so far on the gaping hole that just appeared in General Motors' September 30th balance sheet - some $41 billion more or less. (At that level who cares about a billion or two?) The deficit net worth suggests that even if you added back the total of all GM dividends paid over the last 100 years, you would still have a deficit.Put another way, this suggests that, just like the airline industry, in 100 years General Motors has never made a true profit. Isn't that an interesting thought? Further, isn't it somewhat significant that no analysts have commented on the huge deficit? Just how important is the balance sheet, as compared to the profit and loss statement, if nobody is paying attention?

Yet the Financial Accounting Standards Board insists the balance sheet should have primacy, and that operating results for the year can best be measured by subtracting the beginning balance sheet from the ending balance sheet. FASB is pushing fair value financial reporting, but how can GM assert with a straight face that its deferred tax asset had a fair value of some $33 billion on June 30 and had zero value on September 30th? Things move quickly in the financial arena, but do they move that fast?

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