Final answer:
Partial-year depreciation is usually calculated using the half-year convention, which allows a half year's worth of depreciation in the period of acquisition and disposal. This method standardizes depreciation calculations for accounting and tax purposes.
Step-by-step explanation:
In computing partial-year depreciation, depreciation is typically calculated by assuming a half year's worth of depreciation in the period of acquisition and disposal of an asset.
This is commonly referred to as the half-year convention. Under this convention, it is assumed that the asset was in service for half the year, regardless of when it was actually bought or disposed of during the fiscal year. This method aims to simplify the calculation for tax and accounting purposes, providing a standardized approach across different assets and situations.
For instance, suppose a company purchases a piece of equipment for its operations in the month of April and decides to sell it in November two years later. Using the half-year convention, the company would claim half a year's worth of depreciation expense in the year of acquisition and half a year's worth in the year of disposal, irrespective of the actual months the purchase and sale occurred.