Half-Year Convention For Depreciation
Definition of 'Half-Year Convention For Depreciation'A depreciation schedule that treats all property acquired during the year as being acquired exactly in the middle of the year. This means that only half of the full-year depreciation is allowed in the first year, with the remaining balance being deducted in the final year of the depreciation schedule, or the year that the property is sold. |
|
Investopedia explains 'Half-Year Convention For Depreciation'The half-year convention for depreciation applies to both modified accelerated cost recovery systems and straight-line depreciation schedules. There is also a mid-quarter convention that is used instead of the half-year convention if the aggregate depreciable base of new property was greater than 40% and was used in service sometime during the last three months of the year. |
Related Definitions
Articles Of Interest
-
Understanding Pro-Forma Earnings
These figures can either shed light on a company's performance or skew it. Find out why. -
Understanding The Income Statement
Learn how to use revenue and expenses, among other factors, to break down and analyze a company. -
An Introduction To Depreciation
Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line. -
Free Cash Flow: Free, But Not Always Easy
Free cash flow is a great gauge of corporate health, but it's not immune to accounting trickery. -
Avoid Capital Gains Tax On Your Home Sale
If you have property to sell and want to avoid capital gains tax, a Section 1031 exchange may be the answer. -
What are pro forma earnings?
Great question, but it is not easily answered, because pro forma earnings figures are inherently different for different companies. There are no universal guidelines that companies must follow ... -
What is the difference between amortization and depreciation?
Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally expensed based on the time period over which the asset was ... -
Pay Attention To The Proxy Statement
Don't overlook this overview of a company's well-being. -
Earnings Guidance: Can It Accurately Predict The Future?
Explore the controversies surrounding companies commenting on their forward-looking expectations. -
Depreciation: Straight-Line Vs. Double-Declining Methods
Appreciate the different methods used to describe how book value is "used up".
Free Annual Reports