Asset recognition and measurement. The following hypothetical transactions relate to Nestlé S.A., the Swiss chocolate manufacturer. Indicate whether each transaction immediately gives rise to an asset of the company under U.S. GAAP and separately, under IFRS. If Nestlé recognizes an asset, state the account title, the amount, and the classification of the asset on the balance sheet as either a current asset or a noncurrent asset. Nestlé reports its results in millions of Swiss Francs (CHF).
a. Nestlé invests CHF800 million in a government bond. The bond has a maturity value of CHF1,000 million in five years, and Nestlé intends to hold the bond to maturity.
b. Two months prior to its year end, Nestle pays its insurer CHF240 million to cover annual premiums on its European plants.