HomeGlossaryAccelerated Cost Recovery System (ACRS)

Accelerated Cost Recovery System (ACRS)

Explore commonly used personal finance terms.

The Accelerated Cost Recovery System (ACRS) was a method introduced in the U.S. to allow for faster depreciation of assets, giving businesses tax deductions earlier in an asset’s life. ACRS enabled companies to recover the costs of assets more quickly than traditional depreciation, reducing taxable income sooner. This system was later replaced by the Modified Accelerated Cost Recovery System (MACRS) but remains a foundational concept in tax planning for asset depreciation, impacting cash flow and tax strategies.

Other glossary terms

Account Statement

Summary of transactions in a financial account

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Accounts Payable

Amount owed to suppliers

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Accounts Receivable Financing

Financing secured by accounts receivable

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Accounts Receivable Turnover

Ratio measuring how effectively credit sales are collected

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Accrued Benefit

Pension benefit earned to date

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Accrued Dividend

Dividend earned but not yet received

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Accrued Expense

Expense recognized before it’s paid

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Accrued Income

Income earned but not yet received

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Accrued Interest

Interest earned but not yet paid

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Accrued Liability

Expense recognized but not yet paid

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Accrued Market Discount

Gain on a bond bought below par value

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Accrued Revenue

Revenue earned but not yet received

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Accumulated Benefit Obligation (ABO)

Estimated pension liability based on current salary

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Accumulated Deficit

Negative retained earnings balance

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Accumulated Depreciation

Total depreciation taken on an asset over time

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Accumulated Earnings

Profits retained for reinvestment rather than paid out as dividends

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Accumulated Funding Deficiency

Shortfall in required pension plan funding

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Accumulated Interest

Interest that has accumulated but not yet paid

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Accumulated Other Comprehensive Income (AOCI)

Gains and losses excluded from net income

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Accumulation Account

Account used for reinvesting investment earnings

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