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Any of the following methods may be used for calculating depreciation expense for the initial period of service and the ending period of asset life. This option is set at the company level. Examples of these options are available on the depreciation methods page.
- Period of Service: A full period of depreciation expense will be allocated to the initial period of service and no depreciation expense will be allocated to the ending period of asset life (period of disposal).
- Period of Disposal: A full period of depreciation expense will be allocated to the ending period of asset life (period of disposal) and no depreciation expense will be allocated to the initial period of service.
- Half Period: One half of a full period of depreciation expense will be allocated to the initial period of service and one half of a full period of depreciation expense will be allocated to the ending period of asset life (period of disposal).
- Proportional: Depreciation expense will be calculated based on the proportion of the period the asset was in service. If the company is set to calculate depreciation on a monthly basis then the proportion is based on days. If the company is set to calculate depreciation on a annual basis then the proportion may be based on either days or months.
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