Financial Definition of Accelerated Depreciation

Any depreciation method that produces larger deductions for depreciation in the early years of a project’s life. Accelerated cost recovery system (ACRS), which is a depreciation schedule allowed for tax purposes, is one such example.

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Accelerated Depreciation in Historical Law

You might be interested in the historical meaning of this term. Browse or search for Accelerated Depreciation in Historical Law in the Encyclopedia of Law.

Search for legal acronyms and/or abbreviations containing Accelerated Depreciation in the Legal Abbreviations and Acronyms Dictionary.

Meaning of Accelerated Depreciation in the United States Tax System

As in many other countries (for example, in many countries in Europe), Accelerated depreciation is a method of depreciation under which taxpayers may allocate larger depreciation deductions, often in early years (first year in general). It offers greater deductions that are allowed under straight-line depreciation. It is applied to business property such as plant and machinery. In the United States, the business taxpayer may depreciate the cost at a rate faster rate in case of assets or property, except real estate. The rate of depreciation is determined by methods, chosen for income tax or accounting purposes, One method of accelerated depreciation is the double declining balance method (DDB). If straight-line deductions equal 5% of depreciable basis, DDB allows a deduction of 10% (200% of 5%), but applied to the undepreciated basis. For example, several business assets have a five-year life for tax purposes. With straight-line depreciation, the taxpayer would be permitted to write off 20% of the cost each year; the accelerated depreciation generally allows the business to deduct 20% of the business cost the first year, 32% the second, 19.2% the third, 11.52% in years four and five, and the remaining 5.8% in the sixth year. Thus the deductions in the double declining balance method and some other accelerated method decline each year.There is the “midyear” convention, which states that business goods are put into service in the middle of the year. Some years, for political or tax reasons, there are also bonus depreciation for business assets created by special rules. For example, these rules let business taxpayers 50% of depreciation during the first part of 2010 and 100% bonus depreciation for assets put in service after September 8, 2010 and before December 31, 2011. The last means the taxpayer is able to write off the full cost of business assets in the first year. .

See also other Tax Terms and Definitions in U.S.A.

accelerated cost recovery system; double declining balance; sum-of-the-years’- digits depreciation.

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What does Accelerated depreciation mean in American Law?

The definition of Accelerated depreciation in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:

See depreciation.

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Vocabularies (Semantic Web Information)

United States Tax Concept of Accelerated Depreciation

Accelerated depreciation is a method of depreciation that produces larger deductions for depreciation in the early years of an asset’s life versus spreading the cost evenly over the life of the asset, as with the straight-line depreciation method. For most business property, except real estate, the law allows you to depreciate the cost at a rate faster than would be allowed under straight-line depreciation.

Concept of Accelerated Depreciation in the context of Real Property

A short definition of Accelerated Depreciation: A general term including any method of depreciation greater than straight line depreciation (see which).

Concept of Accelerated Depreciation in the context of Real Property

A short definition of Accelerated Depreciation: A general term including any method of depreciation greater than straight line depreciation (see which).