Definition of Modified Accelerated Cost Recovery System (MACRS)
Modified Accelerated Cost Recovery System (MACRS) is an accounting method that allows the owner to recover a larger portion of the asset’s value in the early years of its life.
Applying "Modified Accelerated Cost Recovery System (MACRS)" to Securities Exams:
MACRS is an accounting method used when depreciating an asset or assets. It allows for greater depreciation in the early years of the assets life, and little to no depreciation in later years. It tends to be employed by investors who need a larger tax write off upfront, and are less concerned with the tax implications down the road. It contrasts sharply with straight line depreciation where an asset is depreciated by the same amount each year until the value is zero.