Acquisition Cost
Accounting glossary · Understand, connect, apply
Acquisition cost is the amount attributed to obtaining an asset, including eligible directly attributable costs needed to bring it to its intended condition and location.
Example
A machine costs 10,000 plus 500 delivery and 1,000 necessary installation. Its initial cost is 11,500 if all amounts qualify.
Remember the difference
Not every payment surrounding a purchase is capitalised. Training, general administration and other costs require assessment under the relevant standard.
Updated 3 November 2026. Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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