DEFINITION of 'Accelerated Cost Recovery System - ACRS'

The accelerated cost recovery system was a U.S. federal tax break that was introduced in 1981 and replaced in 1986.

BREAKING DOWN 'Accelerated Cost Recovery System - ACRS'

The Economic Recovery Tax Act of 1981 included the accelerated cost recovery system (ACRS), which changed the rules for depreciating assets purchased from 1980 to 1986. Rather than depreciating income-generating assets using a straight-line approach based on the lifetime of the asset, ACRS allowed taxpayers to depreciate them on shorter schedules based on cost recovery. Accelerated depreciation increased the deductions property owners were able to claim, which the law's proponents believed would accelerate economic growth.

ACRS was modified in 1984, and the Tax Reform Act of 1986 replaced it with the modified accelerated cost recovery system (MACRS).

  1. Recovery Property

    Recovery Property was a term used when the Accelerated Cost Recovery ...
  2. Alternative Depreciation System ...

    Alternative Depreciation System is a depreciation schedule with ...
  3. General Depreciation System - GDS

    The general depreciation system (GDS) is the most commonly used ...
  4. Recovery Rate

    Recovery rate is the extent to which principal and accrued interest ...
  5. Estimated Recovery Value (ERV)

    Estimated recovery value (ERV) is the projected value of an asset ...
  6. Depreciable Property

    Depreciable property is any type of asset that is eligible for ...
Related Articles
  1. Small Business

    5 Tips for Getting Into a Startup Accelerator

    Getting into a startup accelerator is extremely competitive, but these five tips can help.
  2. Trading

    The 6 Signs Of An Economic Recovery

    For all the talk of whether the economy is recovering or sinking, what should a recovery actually look like?
  3. Taxes

    Recoverable Depreciation: How it Works

    Recoverable depreciation is a concept used in many insurance policies and claims.
  4. Investing

    Understand the Security Types of Corporate Bonds

    Any investor should be aware of the different security types regarding corporate bonds as well as the direct correlation to potential recovery rates.
  5. Investing


    Otherwise known as Earnings Before Interest, Taxes, Depreciation and Amortization. Learn more about this indicator of a company's financial performance.
  6. Insights

    A Concise History Of Changes In U.S. Tax Law

    We look at how U.S. taxes have changed since their inception.
  7. Taxes

    How the GOP Tax Bill Affects You

    Here's how the new tax bill changes the taxes you file in 2018.
  8. Taxes

    Could The Fair Tax Movement Ever Replace The IRS?

    Although many taxpayers would love to see the IRS abolished, only a handful of thinkers have come up with any sort of viable replacement plan. The Fair Tax is one such idea that has continued ...
  1. Does accumulated depreciation affect net income?

    Accumulated depreciation is a running total of the depreciation expense that has been recorded over the years. However, it ... Read Answer >>
  2. Why is accumulated depreciation a credit balance?

    Accumulated depreciation is the cumulative depreciation of an asset that has been recorded. Accumulated depreciation increases ... Read Answer >>
  3. How does depreciation affect cash flow?

    Depreciation is a non-cash accounting charge doesn't directly affect cash flow, but there are certain tax situations whereby ... Read Answer >>
  4. What is the relationship between accumulated depreciation and depreciation expense?

    Understand the relationship between accumulated depreciation and depreciation expense. Learn how each one is accounted for ... Read Answer >>
  5. When should I use depreciation expense instead of accumulated depreciation?

    Distinguish differences between depreciation expense, which is reported on the income statement, and accumulated depreciation ... Read Answer >>
Trading Center