accelerated Cost Recovery System

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In the USA, a system of depreciation designed to encourage capital investment by businesses. It permits a quicker recovery of an asset’s cost to provide higher tax benefits in the earlier years of its use. A higher depreciation charge is made to the profit and loss account in the early years, thus reducing the amount of profit assessable for tax. The modified accelerated cost recovery system (MACRS) was introduced in 1986.

Subjects: Economics — Accounting.

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