Remaining Value Over Remaining Life Convention

The remaining value over remaining life method uses a full-month convention in calculating depreciation allowances. The full-month convention allows an asset a full period's worth of depreciation in the period that you place the asset in service. Conversely, no depreciation is allowed in the period of disposal.

If you convert an asset to remaining value over remaining life from any other method, the convention type associated with the former method is disregarded, and the asset's remaining life is determined as though the full-month convention had been used in the acquisition year.