id = "depreciation-disposal-in-final-month"
title = "A disposal in the life's final month depreciates that month by its days held"
rule = "A disposal dated inside an asset's final month takes depreciation for the days held in that month, not the month's whole charge."
status = "CONVENTION"
sources = ["ASC 360-10-35-4"]
tags = ["depreciation", "disposal", "final-month", "p3-defect-22"]

[setup]
currency = "USD"
fiscal_year_start = "01-01"
basis = "accrual"
rounding = "half-away-from-zero"

[[setup.accounts]]
code = "1000"
name = "Bank"
type = "asset"

[[setup.accounts]]
code = "1500"
name = "Equipment"
type = "asset"

[[setup.accounts]]
code = "1510"
name = "Accumulated Depreciation"
type = "asset"

[[setup.accounts]]
code = "3000"
name = "Capital"
type = "equity"

[[setup.accounts]]
code = "6200"
name = "Depreciation Expense"
type = "expense"

[[setup.accounts]]
code = "7100"
name = "Gain or Loss on Disposal"
type = "revenue"

# Asset X: 12,000.00, no salvage, 12 months from 2026-01-01 (1,000.00 a
# month; December the final month).
[[setup.assets]]
id = "X"
description = "Asset X"
cost = "12000.00"
salvage = "0.00"
life_months = 12
in_service = "2026-01-01"
method = "straight_line"
cost_account = "1500"
accumulated_account = "1510"
expense_account = "6200"

[[events]]
date = "2026-01-01"
description = "Capital"
lines = [
  { account = "1000", side = "debit", amount = "12000.00" },
  { account = "3000", side = "credit", amount = "12000.00" },
]

[[events]]
date = "2026-01-01"
description = "Bought asset X"
lines = [
  { account = "1500", side = "debit", amount = "12000.00" },
  { account = "1000", side = "credit", amount = "12000.00" },
]

[[events]]
run_depreciation = { asset = "X", period = "2026-01" }

[[events]]
run_depreciation = { asset = "X", period = "2026-02" }

[[events]]
run_depreciation = { asset = "X", period = "2026-03" }

[[events]]
run_depreciation = { asset = "X", period = "2026-04" }

[[events]]
run_depreciation = { asset = "X", period = "2026-05" }

[[events]]
run_depreciation = { asset = "X", period = "2026-06" }

[[events]]
run_depreciation = { asset = "X", period = "2026-07" }

[[events]]
run_depreciation = { asset = "X", period = "2026-08" }

[[events]]
run_depreciation = { asset = "X", period = "2026-09" }

[[events]]
run_depreciation = { asset = "X", period = "2026-10" }

[[events]]
run_depreciation = { asset = "X", period = "2026-11" }

# Disposed of 2026-12-10 for 1,000.00.
[[events]]
date = "2026-12-10"
dispose_asset = { asset = "X", proceeds = "1000.00", proceeds_account = "1000", gain_loss_account = "7100" }

# Hand check (worked without the code): January..November run, 11,000.00.
# December held through the 10th: 1,000.00 x 10/31 = 322.580... -> 322.58.
# Accumulated 11,322.58; book value 677.42; gain 1,000.00 - 677.42 =
# 322.58. (Before P3: 1,000.00 of depreciation and a 1,000.00 gain.)
[[expect]]
query = "disposal"
asset = "X"

[expect.values]
final_depreciation = "322.58"
catch_up_depreciation = "0.00"
excess_depreciation = "0.00"
accumulated = "11322.58"
book_value = "677.42"
gain_loss = "322.58"

[[expect]]
query = "balances"
as_of = "2026-12-31"

[expect.values]
"1000" = "1000.00"
"1510" = "0.00"
"6200" = "11322.58"
"7100" = "322.58"