Under the half-year convention,six months' depreciation is recorded on an asset in the year of acquisition and in the year of retirement regardless of the month in which the asset is actually purchased or retired.

Question

Quizplus · Accepted Answer

The statement accurately describes the half-year convention for depreciation. It is a widely used method of calculating depreciation that assumes that an asset is used for half a year in the year it is acquired and half a year in the year it is retired, regardless of the actual purchase or retirement date. This helps simplify the calculation of depreciation and ensures that the total amount of depreciation over the asset's life is the correct amount.

Under the Half-Year Convention,six Months' Depreciation Is Recorded on an Asset