Initial valuation includes the fair value of the purchased asset plus the amount paid for all expenditures to get the asset ready for use. How do you determine the fair value at acquisition date? Depends on how the asset is acquired. o Cash purchase vs. Non-cash acquisitions/deferred payment contract Examples: A company buys equipment for cash. o How do you value the new asset in this scenario? A company buys a building with a note payable. o How do you value the new asset in this scenario?