General Motors (GM) will form a VEBA to put billions of dollars in future employee healthcare expenses into it. However, "GM is still funding the trust, so it still has to pay the costs. ... The important thing is that the health care costs will now be off our balance sheet. ... Wouldn't it have made more sense to come up with a system that might have actually reduced those costs", Loren Steffy (LS) in the Houston Chronicle, 5 October.
Right on LS! As I have said before, when you see a "financing innovation" ask what it lets the new "owner"do the old one couldn't. This VEBA seems to lack economic substance. Will Deloitte insist GM consolidate the VEBA if it lacks substance and CPAs should elevate substance over form? Will Deloitte find time to have its employees consider this issue? With $73 million in GM fees last year, it appears Deloitte could spend five to ten hours considering this. Will the Mounties Dudley Do-right save Nell Fenwick tied to the train tracks from the oncoming train? Stay tuned for the next installment of this saga. As LS noted, GM didn't do so well in offloading Delphi's labor costs.
Right on LS! As I have said before, when you see a "financing innovation" ask what it lets the new "owner"do the old one couldn't. This VEBA seems to lack economic substance. Will Deloitte insist GM consolidate the VEBA if it lacks substance and CPAs should elevate substance over form? Will Deloitte find time to have its employees consider this issue? With $73 million in GM fees last year, it appears Deloitte could spend five to ten hours considering this. Will the Mounties Dudley Do-right save Nell Fenwick tied to the train tracks from the oncoming train? Stay tuned for the next installment of this saga. As LS noted, GM didn't do so well in offloading Delphi's labor costs.
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