The loss reported Wednesday was one of the biggest quarterly corporate deficits ever, and it sent GM's shares down about 2 percent in morning trading.
GM attributed the third-quarter loss to a $38.6 billion noncash charge largely related to establishing a valuation allowance against accumulated deferred tax credits in the U.S., Canada and Germany, as well as mortgage losses at GM's former financial arm, GMAC Financial Services.
But accounting rules require that companies expecting to keep losing money cannot keep carrying deferred tax credits indefinitely and must write down their value.
GM Chairman and Chief Executive Rick Wagoner said he knew the charge would be difficult to comprehend for some.
"I think you'd have to have a Ph.D. in accounting to understand it," Wagoner said during an interview on "The Paul W. Smith Show" on WJR-AM.
"It doesn't have any impact at all," he said. "I would encourage people not to overreact in a negative way to it."
What might be considered more troubling for GM, though, is continuing losses in its home market, North America, where it reported a net loss from continuing operations of $247 million without the charge for the latest quarter. That compares with a net loss of $667 million in the year-ago period.
The company's overall net loss amounted to $68.85 per share, compared with a net loss of $147 million, or 26 cents per share, in the third quarter of last year.
It also included a favorable $3.5 billion after-tax gain on the $5.4 billion sale of Allison Transmission in August.
Without special items, the company reported a $1.6 billion loss, or $2.80 per share.
The company reported record third-quarter automotive revenue of $43.1 billion and record global sales for the quarter of 2.39 million cars and trucks.
"We continue to implement the key elements of our North America turnaround strategy, and these initiatives are driving steady improvement in our financial results, despite challenging North America market conditions," Wagoner said in a statement.
The huge charge, announced after the stock market closed on Tuesday, surprised Wall Street analysts who had expected a relatively small loss excluding special items. Seventeen analysts polled by Thomson Financial expected the company to lose 25 cents per share without the charge.
Chief Financial Officer Fritz Henderson said accounting rules required the company to take the noncash charge because its cumulative three-year quarterly earnings worsened.
When the company becomes profitable, the tax benefits could still be used, Henderson said.
"Economically I would say the tax benefits are there. We can use them when we turn profitable. So nothing has changed in terms of the economics of the business," he said Wednesday.
GM reported a loss of $757 million from its 49 percent stake in GMAC Financial Services, due largely to losses at ResCap, GMAC's mortgage arm.
GMAC formerly was controlled by GM. Cerberus Capital Management LP and other private-equity firms bought a 51 percent stake in GMAC in November 2006, before weakness in the mortgage industry became widely known.
GMAC on Thursday posted a $1.6 billion loss for the third quarter. It included a $2.3 billion loss at ResCap, which offset profits elsewhere.
"Obviously ResCap turned into a pretty substantial loss position, and it affected us directly," Henderson said.
He said GM's automotive business ran at about a break-even level, posting adjusted net income of $122 million for the quarter due largely to profits at its Asia Pacific and Latin America and Middle East regions.
He would not predict when GM would return to profitability.
GM shares fell 74 cents, or 2.1 percent, to $35.42 in morning trading Wednesday.