When an asset is purchased during the year it is not necessary to record depreciation expense in the first year under the declining-balance depreciation method.

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Under the declining-balance depreciation method, depreciation expense is calculated based on the asset's book value at the beginning of the year. Therefore, if an asset is purchased during the year, it will have a book value and depreciation expense must be recorded in the first year of use.

When an Asset Is Purchased During the Year It Is