Treatment of option premium and holding cost of marketable security

A company’s records show following regarding marketable securities.

Date of purchase Jan-1

Acquisition cost $25,000

Option premium $4,000

Holding cost $8,000

Brokerage fees $2,000

Market value on Dec-31 $30,000

Calculate the amount of gain or loss on revaluation to be reported of the income statement as of December 31.

Answer options:

Loss of $9,000.

Loss of SI ,000.

Gain of S3,000.

Gain of $5,000.

Answer : Revaluation gain = $30,000 - ($25,000 + $2,000) = $3,000. Incidental costs should be added to acquisition cost in the calculation of revaluation gain.

My questions:

  1. Why is option premium not part of the cost? If possible, provide GAAP citation

  2. What is are examples of holding cost of security and why it is not added to acquisition cost. If possible GAAP citation