The half-year convention allows us to take six months depreciation during the first year of an asset's life even if the asset was purchased on January 25th.

Question

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The half-year convention assumes that an asset is in service for only half of the first year, regardless of when it was placed in service. Therefore, even if the asset was purchased on January 25th, the assumption is that it was in service for only six months of that year, allowing for six months of depreciation to be taken.

The Half-Year Convention Allows Us to Take Six Months Depreciation