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Summary Of Significant Accounting Policies
3 Months Ended
Mar. 31, 2012
Accounting Policies [Abstract]  
Summary Of Significant Accounting Policies
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, including certain special purpose financing trusts utilized in securitization transactions (“Trusts”) and credit facilities which are considered variable interest entities (“VIE’s”). All intercompany transactions and accounts have been eliminated in consolidation.
The interim period consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles ("GAAP") in the United States of America. These interim period financial statements should be read in conjunction with our consolidated financial statements that are included in the Annual Report on Form 10-K filed on February 27, 2012.
The consolidated financial statements as of March 31, 2012, and for the three months ended March 31, 2012 and 2011, are unaudited and, in management’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for such interim periods. Certain prior year amounts have been reclassified to conform to the current year presentation. The results for interim periods are not necessarily indicative of results for a full year.
The preparation of financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the amount of revenue and costs and expenses during the reporting periods. Actual results could differ from those estimates and those differences may be material. These estimates include, among other things, the determination of the allowance for loan losses on finance receivables, estimated recovery value on leased vehicles, goodwill, intangible assets, income taxes and the expected cash flows on the pre-acquisition finance receivables.
Related Party Transactions
We were acquired by General Motors Company ("GM") on October 1, 2010. We offer loan and lease finance products through GM dealers to consumers purchasing new and certain used vehicles manufactured by GM. GM makes cash payments to us for offering incentivized rates and structures on these loan and lease finance products under a subvention program with GM. At March 31, 2012 and December 31, 2011, we have an intercompany subvention receivable from GM of $25.4 million and $37.4 million, respectively, representing payments due from GM under the subvention program resulting in a non-cash investing activity.
Recent Accounting Pronouncements
In April 2011, ASU 2011-03 ("2011-03"), Reconsideration of Effective Control for Repurchase Agreements, was issued effective prospectively for new transfers and existing transactions that are modified in the first interim or annual period beginning on or after December 15, 2011. This guidance amends the sale accounting requirement concerning a transferor's ability to repurchase transferred financial assets even in the event of default by the transferee, which typically is facilitated in a repurchase agreement by the presence of a collateral maintenance provision. 2011-03 did not have an impact on our consolidated financial position, results of operations and cash flows.
In May 2011, ASU ("2011-04"), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, was issued effective for interim and annual periods beginning on or after December 15, 2011. The adoption of 2011-04 gives fair value the same meaning between GAAP and International Financial Reporting Standards ("IFRSs"), and improves consistency of disclosures relating to fair value. We adopted this ASU effective January 1, 2012, and the adoption did not have an impact on our consolidated financial position, results of operations and cash flows.
In June 2011, ASU ("2011-05"), Comprehensive Income: Presentation of Comprehensive Income, was issued effective for interim and annual periods beginning after December 15, 2011, with early adoption permitted. 2011-05 amends current guidance on reporting comprehensive income and eliminates the option to present the components of other comprehensive income as part of the statement of shareholders’ equity. Instead, comprehensive income must be reported in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements. In December 2011, ASU 2011-12 was issued deferring the effective date for implementation of ASU 2011-05 related only to reclassification out of accumulated other comprehensive income until a later date to be determined after further consideration by the FASB. We adopted this ASU effective January 1, 2012, and the adoption did not have an impact on our consolidated financial position, results of operations and cash flows as we already present a statement of comprehensive income.
In December 2011, ASU ("2011-11"), Disclosures about Offsetting Assets and Liabilities, was issued effective for interim and annual periods beginning January 1, 2013. 2011-11 amends the disclosure requirements on offsetting in ASC Topic 210 by requiring enhanced disclosures about financial instruments and derivative instruments that are either (i) offset in accordance with existing guidance or (ii) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset on the balance sheet. ASU 2011-11 is effective for us starting January 1, 2013 and we do not expect the adoption to have an impact on our consolidated financial position, results of operations and cash flows.