What does asset acquisition mean on the CPA exam?
Asset acquisition. Buying a group of assets that does not amount to a business. Cost is allocated on relative fair value, transaction costs are capitalized, and no goodwill arises.
Defined against ASC 805-50.
Which CPA exam sections use asset acquisition?
Asset acquisition appears in the BAR section of the CPA exam.
Related terms
- asset retirement obligation: A legal obligation associated with the retirement of a tangible long-lived asset, recognized at fair value in the period incurred, with an equal asset retirement cost capitalized into the asset.
- capitalize: To record a cost as an asset and spread it over the periods it benefits, rather than expensing it immediately.
- goodwill: An asset representing the future economic benefits of acquired assets not separately identified, measured as consideration less identifiable net assets.
- held for sale: A classification for a component the entity is actively marketing and expects to sell within a year.
- business combination: A transaction in which one entity obtains control of a business.
- net realizable value: Estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation.