Calculations and Averaging Conventions

Averaging conventions are used to determine the beginning and end of an asset's recovery period. The recovery period determines how much an asset depreciates in the first and last year of service. Rather than using the asset's in-service dates, LN uses these dates to calculate the depreciation amounts for the first and last year. The averaging conventions are used as information-only and are stored in the Fixed Assets module for use with the federal and other tax books.