Solved Questions Financial Accounting free essay sample

Nestle would record the bond at acquisition cost, not the amount it will receive at maturity. b. Both U. S. GAAP and IFRS would recognize Prepaid Insurance (current asset); CHF240 million would be recorded initially. At Nestle’s year-end, the balance in the Prepaid Insurance account would reflect the two months usage of the insurance, reducing the balance to CHF200 [= CHF240 – (CHF240 X 2/12)] million. . Both U. S. GAAP and IFRS would recognize Option to Purchase Land (noncurrent asset), CHF6 million. d. Neither U. S. GAAP nor IFRS recognizes the employment contract, a mutually unexecuted contract, as an asset. e. Under U. S. GAAP, Nestle would record only the costs of obtaining the patent as an asset on its balance sheet, Patent (noncurrent asset), CHF0. 5 million. The remaining CHF80 million is an expense of the period. Under IFRS, Nestle would recognize Research Expense of CHF48 (= 60% X CHF80) million in the period incurred and record a Development Asset (noncurrent asset) at the acquisition cost of CHF32 million (= 40% of CHF80 million) as an asset on its balance sheet, which it would depreciate over the useful life of the product. We will write a custom essay sample on Solved Questions Financial Accounting or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Under IFRS, Nestle would also recognize the patent as an asset on its balance sheet, Patent (noncurrent asset), CHF0. 5 million. f. Under both U. S. GAAP and IFRS, Nestle would not recognize the cocoa beans as an asset until it receives the inventory. 3. 23