Acquisition cost concept helps determine the actual expenses of an asset; it does not only include its purchase price but many other costs as well.
Acquisition cost. Refers to the price (including the closing costs) to purchase another company or property. In the context of investments, refers to price plus brokerage commissions, of a security, or the sales charge applied to load funds. Acquisition Cost. 1. The total cost for a firm to buy an asset. The acquisition cost includes all legal fees, closing costs, or other increases. Likewise, it makes allowances for discounts. Importantly, however, the acquisition cost does not include any applicable sales tax. 2. The acquisition cost includes all legal fees, closing costs, or other increases. Likewise, it makes allowances for discounts. Importantly, however, the acquisition cost does not include any applicable sales tax. DEFINITION of 'Acquisition Cost'. 1. The cost that a company recognizes on its books for property or equipment after adjusting for discounts, incentives, closing costs and other necessary expenditures, but before sales taxes. 2. The cost of a business to acquire a new customer. The company recognizes costs, including marketing and incentives, to introduce new customers to the company's products and services. The customer acquisition cost is calculated by dividing total acquisition costs by total new customers over a set period of time. Acquisition cost concept applies to the obtainment of the fixed assets, so that an association might use for its commercial and business activities. Acquisition cost concept helps determine the actual expenses of an asset; it does not only include its purchase price but many other costs as well.
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what does acquisition cost include