General Depreciation System - GDS

AAA

DEFINITION of 'General Depreciation System - GDS'

The most commonly used modified accelerated cost recovery system (MACRS) for calculating depreciation. A general depreciation system uses the declining-balance method to depreciate personal property.

INVESTOPEDIA EXPLAINS 'General Depreciation System - GDS'

The declining-balance method involves applying the depreciation rate against the
non-depreciated balance. For example, if an asset that costs $1,000 is depreciated at 25% each year, the deduction is $250.00 in the first year and $187.50 in the second year, and so forth.

RELATED TERMS
  1. Fully Depreciated Asset

    A property, plant, or piece of equipment which, for accounting ...
  2. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  3. Modified Accelerated Cost Recovery ...

    The new accelerated cost recovery system, created after the release ...
  4. Accounting

    The systematic and comprehensive recording of financial transactions ...
  5. Declining Balance Method

    A common depreciation-calculation system that involves applying ...
  6. Operating Income

    The amount of profit realized from a business's operations after ...
Related Articles
  1. Active Trading

    An Introduction To Depreciation

    Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line.
  2. Investing Basics

    Reading The Balance Sheet

    Learn about the components of the statement of financial position and how they relate to each other.
  3. Options & Futures

    Advanced Financial Statement Analysis

    Learn what it means to do your homework on a company's performance and reporting practices before investing.
  4. Fundamental Analysis

    What's a Prospectus?

    The Security and Exchange Commission (SEC) requires that any company raising money from potential investors through the sale of securities must file a prospectus with the SEC and then provide ...
  5. Fundamental Analysis

    Cash Flow From Operating Activities

    Cash flow from operating activities is a section of the Statement of Cash Flows that is included in a company’s financial statements after the balance sheet and income statements.
  6. Fundamental Analysis

    What's Net Debt?

    Net debt is one of the many metrics used to measure a company’s ability to pay its debts. There are other metrics such as net liquidity ratio, cash conversion cycle and the debt to equity ratio, ...
  7. Active Trading Fundamentals

    What is the difference between cash flow and fund flow?

    See how cash flow and fund flow differ from each other, and why fund flow can be used very differently by accountants and investors.
  8. Fundamental Analysis

    What kind of financial reporting requirements does GAAP set out?

    Look at some of the major financial reporting requirements set forth by the generally accepted accounting principles and the required financial statements.
  9. Fundamental Analysis

    What is the difference between the debt ratio of a company and the debt ratio of an individual?

    Discover the different financial evaluation measures that are most commonly applied to individuals and corporations, respectively.
  10. Fundamental Analysis

    What is the difference between the current ratio and the acid test ratio?

    Read about the main differences between the acid-test ratio and the current ratio, two measures of a company's liquidity and solvency.

You May Also Like

Hot Definitions
  1. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  2. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  3. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  4. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  5. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  6. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
Trading Center