A column in Portfolio.com links to a blog explaining the GM writedown. As the blog suggests, how much of GM’s perceived $210 B market cap is actually a bet that the company is too big to fail. The blogger makes the point that this charge is more than GM has made in the last several years. Are there old assets at historical cost from the 1940s, well sure, that land under those plants is worth something as are the plants, question is, how much would it be worth in a distress sale.
Take a read and ponder how we calculate value, we will be exploring the reality of historical cost when we get to depreciation in Chapter 10 of the Intermed book.
Professor Elam 
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