Firms use acquisition cost valuations and adjusted acquisition cost valuations for which of the following types of assets?
A) Assets that do not have fixed amounts of future cash flows.
B) Assets that have fixed amounts of future cash flows.
C) Assets with certain future economic benefits.
D) monetary

Question

Quizplus · Accepted Answer

Acquisition cost valuations and adjusted acquisition cost valuations are used for assets that do not have fixed amounts of future cash flows, such as intangible assets like patents, trademarks, and goodwill. These assets cannot be accurately valued based solely on their expected future cash flows, so their value is based on the cost of acquiring them. Assets with fixed amounts of future cash flows can be valued using methods such as discounted cash flow analysis.

Firms Use Acquisition Cost Valuations and Adjusted Acquisition Cost Valuations