GM posts record loss on deferred tax write-down

Yesterday General Motors (GM) posted its biggest ever quarterly loss- a whopping figure of $38.6 billion. Last year for the same period the profit was $497 million. Such a big loss was due to one time items and write-down of deferred tax liability. The tax charge written down at GM is the biggest so far for any firm. These can be attributed as cumulative losses of last three years. GM has written down these because of expected lower profits in near future.

Excluding these exceptional items the losses were to the tune of $1.6 billion. Its financing subsidiary, GMAC Financial Services, has suffered because of subprime mortgage. GM has 49% stake in GMAC and it had contribute to slightly half of it losses.