Explore commonly used personal finance terms.
Acquisition cost includes the purchase price of an asset plus additional expenses such as taxes, shipping, and setup fees, providing a comprehensive basis for evaluating the total investment. This cost is essential for calculating depreciation, capital gains, and net asset value. Businesses factor in acquisition costs when making investment decisions, as they directly impact profitability. For large assets like real estate or machinery, acquisition costs are significant and should be accurately accounted for in financial records.
