Historical cost

The term acquisition cost is defined in the accounting standard for an initial assessment of assets acquired and assets. Acquisition costs are the expenses that are paid to acquire an asset and bring it to an operational state, insofar as they are attributable to the asset individually. Imputed costs are not part of the cost.

In Germany and Austria the assessment criteria to distinguish cost and manufacturing cost. In contrast to the cost, the production cost is an original rating scale for produced assets. The distinction between acquisition and production process has an impact on the original valuation of the asset. Other accounting systems, such as the International Financial Reporting Standards (IFRS ) and the U.S. United States Generally Accepted Accounting Principles (U.S. GAAP) know only one rating scale, " acquisition or production costs " or "Historical Cost" called the assessment standards at cost and manufacturing cost combined ( see IAS 2).

Scope of the acquisition cost

Under the provisions of the German Commercial Code and the Austrian Business Code, the cost of the assessment criteria for the initial measurement of assets acquired. Because of there in § 253 paragraph 1 HGB and the § § 203 anchored to 208 UGB historical cost principle, the ( amortized) cost is the highest value with which an asset in the subsequent period can be evaluated. For depreciable assets, fixed assets, the cost of calculating the depreciation serve. The reduced depreciation cost are also called amortized cost. In the German Accounting Law, there are two exceptions to these principles. Assets that are used solely to meet pension obligations and all other creditors are deprived are recognized in accordance with § 253 paragraph 1 sentence 4 of the German Commercial Code with the value. This is in accordance with § 340e HGB for certain financial instruments in the balance sheet of banks.

Under IFRS and U.S. GAAP, the cost of the rating scale for the initial evaluation of many types of assets acquired. For example, acquired inventories are initially valued at the acquisition cost. Other types of assets, such as certain financial instruments are measured at fair value. The historical cost principle applies in these accounting systems for certain types of assets such as inventories and U.S. GAAP for fixed assets.

In Germany, due to the Maßgeblichkeitsprinzips the trade balance for the tax balance the cost in the tax accounts of rating scale for the initial valuation of acquired assets. Again, the historical cost principle applies analogously to the German Commercial Law. About the tax balance sheet, the initial cost is a rating scale in other areas of German tax law.

Components of the cost

Components according to German and Austrian Accounting Law

According to German and Austrian Accounting Law, the cost of acquisition as follows:

The purchase price is the price that is paid for the acquisition of the asset. It results mostly from invoices or purchase contracts. If an asset to purchased in foreign currency paid, the amount of foreign currency shall be converted at the exchange rate applicable at the date of acquisition of beneficial ownership. A change in the exchange rate until the date of payment, the changes have no effect on the cost. If a total purchase price for several assets, for the purposes of the principle of individual assessment at the individual assets it is split. Among other distribution keys of the purchase price can be divided in proportion to the value of the assets.

The sales tax is only part of the cost, unless the purchaser not reimburse as input tax by the tax office receives ( § 9b paragraph 1 Income Tax Act).

Purchase price, such as discounts, rebates and bonuses, reduce the cost.

In the German Accounting Law, there is an option, the acquisition cost to mitigate non-repayable grants from third parties when they are granted directly for the purchase of the asset.

Acquisition-related costs are expenses that are incurred in addition to the purchase price to acquire the asset, to spend it on his location and to move to an operational state. Acquisition-related costs are to be expended for the acquisition of the asset, for example, fees for registration in the land registry, notary fees, commissions, costs of land surveying, land transfer tax and other non- refundable transfer taxes. Include transport and freight costs, packaging costs, transport insurance contributions and taxes for the reference expended acquisition costs. Cost of building a foundation for the assembly and for the connection to the gas, electricity and water mains are also transaction costs. Further extra costs are operating licenses and cost of trial runs. Sewer contributions, development, street dwellers and others related to the land ownership municipal contributions are incidental acquisition costs of land. Thus, the incidental acquisition costs can be activated, it must be directly attributable to the asset under German and Austrian Accounting Law. This does not include, for example, administrative overheads to the cost.

According to the value theory of sacrifice, the costs for the necessary demolition of an existing building may be part of the cost of a property or building under certain circumstances.

Financing costs for the purchase of the asset are not part of the cost, unless they are directly used to finance the manufacturing process of the supplier.

Subsequent costs are expenses that were incurred after the commissioning of the asset for its expansion, substantial improvement or change in its use purpose. You must be delimited by the conservation effort, which is directly in income. Near acquisition maintenance costs for buildings set in German tax law regularly cost dar. for repairs and maintenance costs are not included in the cost.

Components under IFRS and U.S. GAAP

The composition of the cost of acquisition in accordance with IFRS and U.S. GAAP is, in substance substantially in agreement with the above-described composition. In contrast to the German and Austrian Accounting Law but future demolition and disposal costs of the acquisition cost of an asset can be in accordance with IFRSs and U.S. GAAP if they are based on a present obligation of the acquirer and the obligation not as a consequence of the use of fixed assets to stock production results. In the time of activation is to passivate in the amount of the capitalized obligation a liability. Financing costs in accordance with IFRS and U.S. GAAP part of the cost if they serve directly to the acquisition of an asset, in which it takes a considerable period of time to prepare it for its intended working condition.