What is the Acquisition Cost of an Asset?

Acquisition cost refers to the all-in cost to purchase an asset. These costs include shipping, sales taxes, and customs fees, as well as the costs of site preparation, installation, and testing. When acquiring property, acquisition costs can include surveying, closing fees, and paying off liens. The acquisition costs of an asset are included in its capitalized cost; that is, they are not initially charged to expense. These costs, when aggregated, are considered to be the book value of an asset.

What is the Acquisition Cost of a Customer?

Acquisition cost can refer to the cost to acquire a new customer. These costs include marketing materials, commissions, discounts offered, and salesperson visits. When the cost to acquire a new customer is high, it makes sense to expend significant sums to ensure that the customer continues to buy from the company. This means producing higher-quality products, investing in better customer service, and regularly contacting the customer to see if there are any issues that can be resolved. The acquisition costs of a customer are charged to expense as incurred.