9:
Depreciation
119
25
‰
172F68$.&(("
Tabular value, year 2.
Š
172F8'K$.(&(("
Deduction in second year.
20
‰
172F68$(&(("
Tabular value, year 3.
Š
172F8.K(((&(("
Deduction in third year.
Partial-Year Depreciation
When the acquisition date of an asset does not coincide with the start of
the tax or fiscal year, then the amounts of depreciation in the first and
last years are computed as fractions of a full year’s depreciation. Except
in SL, the intermediate years are computed as sums of fractions. This
does not apply to the ACRS method.
Suppose you acquired an asset in October and wanted to depreciate it
for 3 years. (Your fiscal year begins January 1st.) The depreciation
schedule would affect parts of 4 years, as shown in the illustration. The
3 months from October to December equal ¼ year.
Number of months
Calendar
years
Depreciation
years
1
1
2
2
3
3
4
3
9
3-year life
For SL depreciation, partial-year calculations are easy: calculate the SL
value, then use ¼ of that value for the first year, the full amount the
second and third years, and ¾ of that amount the fourth year.
For DB and SOYD depreciation, each year’s depreciation value is
different, as shown in the table:
