Course Outline
Join PRO

With regard to depreciation, what does the term mid-month convention mean?

Author:
Harold Averkamp, CPA, MBA

Definition of Mid-Month Convention

In depreciation, the mid-month convention means that an asset placed into service anytime during a given month is assumed to have been placed into service in the middle of that month. As a result, there will be one-half month of depreciation in that month.

The same is true for the disposal of an asset. There will be one-half month of depreciation in the month of the disposal.

The mid-month convention is pertinent for the income tax depreciation for certain property.  You can find more on this in the Internal Revenue Service Publication 946.

Examples of Mid-Month Convention

Under the mid-month convention, if a company put a warehouse into service on October 6, it is assumed that the warehouse was put into service in the middle of October and there should be one-half month of depreciation in October.

If a building is placed into service on October 23, it is assumed that the building was put into service in the middle of October. This also means there should be one-half month of depreciation for October.

If a company disposes of an asset on October 25, it is assumed to have been disposed of in the middle of October and one-half month of depreciation is taken for October.

If an asset is disposed of on October 3, it is also assumed that the asset was disposed of in the middle of October and one-half month of depreciation is taken for October.

Join PRO to Track Progress
Must-Watch Video

Learn How to Advance Your Accounting and Bookkeeping Career

  • Perform better at your current job
  • Refresh your skills to re-enter the workforce
  • Pass your accounting class
  • Understand your small business finances
Watch the Video

Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials

Read all 2,645 reviews

Features

PRO

PRO Plus

Features
Lifetime Access (One-Time Fee)
Explanations
Quizzes
Q&A
Word Scrambles
Crosswords
Bookkeeping Video Training
Financial Statements Video Training
Flashcards
Visual Tutorials
Quick Tests
Quick Tests with Coaching
Cheat Sheets
Business Forms
All PDF Files
Progress Tracking
Earn Badges and Points
Certificate - Debits and Credits
Certificate - Adjusting Entries
Certificate - Financial Statements
Certificate - Balance Sheet
Certificate - Income Statement
Certificate - Cash Flow Statement
Certificate - Working Capital
Certificate - Financial Ratios
Certificate - Bank Reconciliation
Certificate - Payroll Accounting

About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

Certificates of
Achievement

Certificates of Achievement

We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping:

  • Debits and Credits
  • Adjusting Entries
  • Financial Statements
  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Working Capital and Liquidity
  • Financial Ratios
  • Bank Reconciliation
  • Payroll Accounting
Badges and Points
  • Work towards and earn 30 badges
  • Earn points as you work towards completing our course
View PRO Plus Features
Course Outline
Take the Tour Join Pro Upgrade to Pro Plus