What do the acronyms “ACRS” and “MACRS” stand for?

Explanation

ACRS is the Accelerated Cost Recovery System, wherein the fixed assets can be depreciated in a shorter time, based on the recovery of the cost of the asset.
 
MACRS is the Modified Accelerated Cost Recovery System wherein the fixed assets are depreciated based on their life and the rate stated by the Internal Revenue Services (IRS) of the U.S.
 
MACRS depreciation classifies the assets in seven categories. This categorization is made on the basis of the number of years over which the assets would be depreciated. The first one is the 3-year class that provides depreciation rates for special manufacturing goods. Computers, automobiles, light-duty trucks are included in the 5-year depreciation class. The 7- year class has heavy industrial equipment and assets like furniture and fittings. The assets that have longer lives than 7 years and upto 10 years are mentioned under 10-year class. Residential real estate properties are categorised under 27.5-year class whereas non residential and commercial properties like industry buildings are classified as 39-year class.

Verified Answer

ACRS stands for Accelerated Cost Recovery System and MACRS stands for Modified Accelerated Cost Recovery System.