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der the modified accelerated cost recovery system, the cost of an asset is recovered: a.over an amount that generally is lower than the historical cost of the asset. b.over a time period that generally is shorter than the economic life of the asset. c.over a time period equal to 90% of the economic life of the asset. d.over an amount that generally is higher than the historical cost of the asset.

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In the United States, the depreciation method utilized for tax reasons is called the modified accelerated cost recovery scheme (MACRS). The capitalized cost of an item may be recouped over a predetermined time via annual deductions under MACRS depreciation. The MACRS system divides fixed assets into classes with predetermined periods of depreciation.

What are the depreciation conventions for the Modified Accelerated Cost Recovery System?

Specific asset types are assigned to categories with different accelerated depreciation schedules under the modified accelerated cost recovery system (MACRS) method of depreciation. Furthermore, GAAP has not authorized MACRS for external reporting, despite the IRS's requirement for it for tax reporting. By dividing one depreciation period by the asset's remaining life, LN determines the percentage for a year in MACRS straight line, and then uses this result along with the averaging convention to calculate the asset's depreciation amount for that year.

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