[donnychristal]

I am really confused on the cost when doing MCQ.

On one of the questions, the explanation clearly stated that ‘Acquisition costs include … and cost of registering and issuing debt and equity securities. Acquisition costs are expensed.’

Then I have the following question coming up on Acquisition Costs

A company incurred the following costs to complete a business combination in the current year:

Issuing debt securities $30,000
Registering debt securities 25,000
Legal fees 10,000
Due diligence costs 1,000

What amount should be reported as current-year expenses, not subject to amortization?

A. $1,000

B. $11,000

C. $36,000

D. $66,000

I chose D because I include the registering and issuing debt securities in the acquisition cost. However, the correct answer is B as the explanation said ‘Debt issuance and debt registration costs are part of the consideration given, and recorded in conjunction with the debt itself.’

Why are the registering and issuing costs not included this time? Can someone explain the difference here? Thanks so much!

AUD: 64, 71, 73, 72, 78
FAR: 75 (expired), 79
BEC: 89
REG: 76

FINGERS CROSSED

FAR - 75
AUD - 64/71
BEC - 85