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Politics : Formerly About Advanced Micro Devices
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To: i-node who wrote (438661)12/6/2008 9:43:42 AM
From: Alighieri  Read Replies (1) of 1574615
 
Normally, such costs are accrued as of the end of each accounting period so that you don't have "legacy" costs. However, when a new deal is struck with UAW which requires them to pay additional benefits for employees who are no longer producing vehicles, the costs are required to flow through as cost of sales, they become part of current inventoriable cost, and are expensed as the inventory is liquidated.

Chances are that these are payments that the company has to make to the pension and benefit funds to cover additional workers who join the retired pool. I doubt that they have added or accrued any new benefits negotiated by UAW...but I am not sure.

it is usually G&A but could conceivably be reported elsewhere in a business this size.

G&A is a period expense, below the GM line and a direct hit to PTI. Where else they could report it?

Al
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