I am studying accounting . I had a question come up and cannot seem to get an answer . An asset was given an 8 year life and a salvage value . they used the half year convention in the first year . I was asked to calculate the depreciation using accelerated in the first year up to when straight line would be more. I calculated correctly up to the last three years and then switched to straight line which was correct . I then deducted the salvage value from the remaining balance which was correct. I took 40% the first 2 years and 20% the last year as the asset had remaining life of 2.5 years . I was ruled incorrect as the answer was divide the amount equally into the last three years .
My professor referred me to the pages in the book covering this . but the book seems to confirm what I did . It states if you start with the half year convention you end with the half year . The idea was to achieve max. early depreciation .
My professor referred me to the pages in the book covering this . but the book seems to confirm what I did . It states if you start with the half year convention you end with the half year . The idea was to achieve max. early depreciation .