cost recovery


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cost recovery

A tax concept commonly called depreciation,but technically different in ways that don't matter to most taxpayers.The explanation is that depreciation is a calculation determined by starting with the acquisition cost of a property and then subtracting the anticipated salvage value when the property's useful life is over.That number is then divided by the number of years one can reasonably assume the property will have a useful life.The resulting figure is the annual depreciation for the property.Because of constant arguments,audits,and litigation over the correct salvage value and the correct useful life for various properties,the IRS replaced the whole depreciation system with the cost recovery system that assigns a useful life to various classes of property,assumes the property will be worthless at the end,and then allows deductions over the course of the useful life.

Cost Recovery

A term sometimes used to refer to depreciation claimed under the ACRS or MACRS methods of depreciation. See also Accelerated Cost Recovery System (ACRS) and Modified Accelerated Cost Recovery System (MACRS).
References in periodicals archive ?
The company's Cost Recovery (BillBack) solutions assist firms by enhancing the automation and processing of any operational and administrative expenses, including print, copy, scan, phone, fax, travel, court fees, research, overnight, courier costs, credit card charges and more on an extremely powerful platform.
The foreign partner's share in cost recovery or profit with regards to gas discovered and produced through Production Sharing Agreements is fixed by the concession agreement, which is approved by parliament and cannot be changed.
Cost Recovery uses information from police and fire reports and a nationwide cost analysis of emergency services to generate bills.
When compared with other facilities surveyed, competition-only facilities were the poorest financial performers, averaging 51 percent cost recovery for indoor and 57 percent cost recovery for outdoor-oriented facilities.
Note that section 168(k) includes regulations relating to the depreciation of the basis of the replacement property in an exchange under section 1031 for modified accelerated cost recovery system (MACRS) property.
In recent years, Congress has narrowed the differences between cost recovery deductions for regular tax purposes and for alternative minimum tax (AMT) purposes.
The court left open the question whether Aviall may pursue a Section 107 cost recovery action for some form of liability other than joint and several.
In prior years, most developers came to our firm, Construction Cost Recovery, after the asset was placed in service.
Copitrak currently works with 44 of the Worlds top 100 law firms, and is quickly becoming the preferred system for Cost Recovery amongst law firms in Tokyo.
He is part of the steering committee of the Cost Recovery Action Group formed to push for depreciation reform.