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Acquisition costs refer to the costs of obtaining the rights to explore and develop an area in order to produce hydrocarbons, search for Oil and Gas Reserves. In the United States as well as in a few other places internationally, individual citizens are allowed to own mineral rights. In contrast, in most countries, the government owns all the mineral rights. A company negotiates with the individual or government to get rights to explore and develop an area. Often, there is a bidding process in an area, wherein the government will award the right to explore and develop to the highest bidder. Normally, an upfront amount is paid by the company to the government or individual holding the rights. This is referred to as a signing bonus. Other costs related to acquisition include legal fees, filing fees, and title examinations. These costs are capitalized under U.S. GAAP as well as under international GAAP. Tsu Oil Company acquired-lights on West Texas Block, Block 3. TSU paid a $500,000 signing bonus to the government. a. The entry under U.S. GAAP is as follows: b. The entry under international GAAP is as follows: TSU Oil Company paid the government of West Texas $100,000 for an option on an offshore block for 90 days. If TSU negotiates an agreement for the block before the option expires and pays an additional $3,000,000 signing bonus, the entry under U.S. GAAP is as follows: Acquisition costs refer to the costs of obtaining the rights to explore and develop an area in order to produce hydrocarbons, search for Oil and Gas Reserves. In the United States as well as in a few other places internationally, individual citizens are allowed to own mineral rights. In contrast, in most countries, the government owns all the mineral rights. A company negotiates with the individual or government to get rights to explore and develop an area. Often, there is a bidding process in an area, wherein the government will award the right to explore and develop to the highest bidder. Normally, an upfront amount is paid by the company to the government or individual holding the rights. This is referred to as a signing bonus. Other costs related to acquisition include legal fees, filing fees, and title examinations. These costs are capitalized under U.S. GAAP as well as under international GAAP. Tsu Oil Company acquired-lights on West Texas Block, Block 3. TSU paid a $500,000 signing bonus to the government. a. The entry under U.S. GAAP is as follows: b. The entry under international GAAP is as follows: TSU Oil Company paid the government of West Texas $100,000 for an option on an offshore block for 90 days. If TSU negotiates an agreement for the block before the option expires and pays an additional $3,000,000 signing bonus, the entry under U.S. GAAP is as follows