What method recognizes a full year's depreciation if the asset is acquired in the first half of the year?

The modified half-year convention is the method that recognizes a full year's depreciation if the asset is acquired in the first half of the year. Under this approach, when an asset is purchased, it is assumed to be in service for a full year regardless of the actual month of acquisition, provided the acquisition occurs in the first half of the year. This results in the asset being depreciated for the entire first year, promoting a more accurate reflection of the asset's economic usage.

In contrast, the regular half-year convention only allows for a half year's depreciation in the year of acquisition if the asset is purchased in the second half of the year, which would not apply in this scenario. The straight-line method computes depreciation equally over the asset's useful life but doesn't inherently consider the timing of acquisition relative to the financial year's end. The units-of-production method is based on actual usage rather than time, so it doesn't provide a fixed allocation of full year's depreciation based on the date the asset is acquired. Thus, the modified half-year convention is specifically tailored to give the desired full year's depreciation in the first half of the year, making it the correct choice.