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accelerated depreciation |
Also found in: Wikipedia | 0.01 sec. |
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Accelerated depreciation Any depreciation method that produces larger deductions for depreciation in the early years of an asset's life. Accelerated cost recovery system (ACRS), which is a depreciation schedule allowed for tax purposes, is one such example. Accelerated Depreciation Any of several systems of increasing the depreciation on an asset. Increasing the depreciation allows the asset's owner to write off more of the value of the asset, at least for some of the years of ownership. This can reduce the owner's tax liability. A common method of accelerated depreciation is the Modified Accelerated Cost Recovery System, which estimates depreciation in a way that bears only a rough relationship to an asset's actual life; it was designed to decrease the taxation in the early years of an asset's ownership.
accelerated depreciation ![]() Depreciation methods that allow larger deductions in early years,trailing off to smaller deductions in later years. It is the opposite of straight-line depreciation, in which equal amounts are depreciated every year.Accelerated depreciation is not allowed for real property, but may be employed for certain components,such as fencing,security systems,carpet,or windows. The most common types of accelerated depreciation encountered in real estate are double declining balance, also called 200 percent declining balance, and the alternative 150 percent declining balance method. Example: Carpeting in residential rental properties may be depreciated over 5 years. Assuming $10,000 worth of carpeting is installed in an apartment building, this is each year's depreciation using the different methods: Accelerated Depreciation Various methods of depreciation that yield larger deductions in the earlier years of the life of an asset than does the straight-line method. The double (or 200 percent) declining balance method is an example of an accelerated depreciation method. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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