The Accelerated Cost Recovery System (ACRS) is a method of tax depreciation introduced in 1981 and modified in 1984. It was used for tangible personal property placed in service between January 1, 1981, and December 31, 1986, and later replaced by the Modified Accelerated Cost Recovery System (MACRS) for assets placed in service after 1986.
Accelerated depreciation is a method of depreciating assets faster than the standard useful-life method, resulting in higher depreciation expenses earlier in the asset's life. This method is particularly useful for assets that lose their value quickly due to rapid innovation or technological change.
Aggregate depreciation refers to the total amount of depreciation expense that has been accumulated over time for a fixed asset or group of assets since the beginning of their use.
Composite depreciation is a method where a single depreciation rate is applied to an entire asset, despite its components having varying useful lives.
Current-cost depreciation is a depreciation charge calculated on the current cost of an asset rather than its historical cost. It adjusts for changes in the value of assets over time to ensure financial statements reflect more accurate asset values.
Equal-Instalment Depreciation, also known as the straight-line method, is a simple and commonly used depreciation method where an asset's cost is evenly spread over its useful life.
Linear depreciation involves writing off a constant amount of an asset's value every year, resulting in a straight-line graph when the depreciation expense is plotted against time.
The sum-of-the-digits method is a technique for calculating the depreciation of a fixed asset, where the majority of the depreciation is recognized in the early years of the asset's life.
