Acquisition Costs

Acquisition costs are expenses directly related to purchasing an asset, including costs like closing fees, legal fees, appraisal fees, and inspection costs. These costs add to the asset’s initial value for accounting purposes and are important for determining the asset’s cost basis. Acquisition costs impact investment decisions, as they increase the total outlay required. Accurate tracking of acquisition costs is essential for financial reporting and for calculating capital gains or losses if the asset is sold in the future.