Fixed Assets

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• Full Month Convention:  Take a full month depreciation in the month of acquisition and nothing in the month of disposal (FM).
• Next Month Convention:  Take a full month depreciation following acquisition, but take nothing in the month of acquisition or the month of disposal (NM).
• No Convention:  Do not invoke any prorate convention on acquisition or disposal (NA).

Depreciation Formula Examples

The following example illustrates the use of the depreciation formula:

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Allocation of depreciation expense calculated using Composite Rate depreciation is based on information associated with each item within the group. Generally this would be asset department/cost center or location information.

Allocation of Depreciation Expense

Depreciation expense is allocated based on the cost center to which the individual item is assigned.

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