WSJ.com - Tracking the Numbers

Bad News For GM in the Wall Street Journal
Accounting Change could wipe out $68 Billion in Equity

Hot on the heals of the news of the GMAC sale, there's a news story regarding a change in accounting rules could wipe out the $10 billion gained from the GMAC sale and then some. In fact, the rules change alone could result in General Motors adding $68 billion in liabilities to its balance sheet to cover pension obligations. According to the WSJ, the accounting change would shift GM's shareholder's equity (aka net worth) from a positive $14.6 billion (at the end of 2005)to a negative $43 billion.

Since that doesn't affect GM's cash position, it doesn't affect GM's ability as a going concern. But if you are a shareholder, you can take it as a clue of how much money GM will have to make in future years before you see any of it.

WSJ.com - Tracking the Numbers