Accelerated cost recovery system (ACRS)

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ACRS

Prior to the Accelerated Cost Recovery System (ACRS), most capital purchases were depreciated using a straight-line method that gave a linear depreciation of the asset over its useful life. ACRS was in force from 1975-1983 in the United States, under the Economic Recovery Tax Act (ERTA) of 1981. ACRS was unique in three ways: property class lives were established, calculations were based on an estimated salvage value of zero, and shorter recovery periods were used to calculate annual depreciation. This resulted in an accelerated write-off of capital costs (in comparison to that available using straight-line depreciation) and was the source of the name, of course.

Depreciation under ACRS = 4 x Straight Line Depreciation