Understanding Depreciation Calculation Concepts
Following are important concepts for effectively calculating depreciation.
Depreciation Calculation Dates
There are three dates from which the application calculates depreciation: the placed-in-service date, the beginning date, and the current through date.
Obtaining Monthly Depreciation Figures
Calculate depreciation each month in succession in order to obtain accurate monthly figures.
Calculating Depreciation for Earlier Periods
You can calculate depreciation for an earlier period, but this resets current depreciation.
Determining When to Use Midquarter Convention
If more than 40% of qualifying property is placed in service during the last three months of the year, you must use the midquarter convention for the tax-related books.
You can calculate depreciation for an asset in up to twenty different books.