Asset Depreciation Range - ADR


Asset Depreciation Range - ADR
An elective accounting method established by the Internal Revenue Code for tangible assets placed into service after 1970. Prior to the ADR system, there were over 100 asset classes for tangible property based on the taxpayer's business and industry. Because the ADR system did not solve the problems it was intended to address, namely, disagreements between the IRS and taxpayers about accounting for the useful life, salvage value and repairs of assets, the Accelerated Cost Recovery System was introduced in 1981 to provide a less complicated way to determine depreciation.

Businesses had more flexibility under the ADR system to determine the useful life of an asset, because the asset depreciation range allowed the taxpayer a 20% leeway above and below the IRS's established useful life for each asset class. Thus, if the established useful life of a desk was considered to be 10 years, the taxpayer could depreciate it over anywhere from eight to 12 years. Depreciation methods allowed by the IRS have changed several times since the ADR system; today the taxpayer must depreciate that same desk over seven or 10 years, depending on the depreciation system used.


Investment dictionary. . 2012.

Look at other dictionaries:

  • asset depreciation range — n: a range of useful lives assigned to types of property under the Internal Revenue Code for purposes of depreciation Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • Asset Depreciation Range System — A range of depreciable ( depreciation) lives the IRS allows for particular classes of assets. Bloomberg Financial Dictionary …   Financial and business terms

  • depreciation — /dapriyshiyeyshsn/ In accounting, spreading out the cost of a capital asset over its estimated useful life. Depreciation expense reduces the taxable income of an entity but does not reduce the cash. A decline in value of property caused by wear… …   Black's law dictionary

  • depreciation — /dapriyshiyeyshsn/ In accounting, spreading out the cost of a capital asset over its estimated useful life. Depreciation expense reduces the taxable income of an entity but does not reduce the cash. A decline in value of property caused by wear… …   Black's law dictionary

  • Capital asset — has two related meanings in the fields of accounting and financial economics. In accounting, a capital asset is an asset that is recorded on a balance sheet as capital that is, property that creates more property, e.g. a factory that creates… …   Wikipedia

  • ADRS — asset depreciation range system система ранжирования амортизации активов …   Финансово-инвестиционный толковый словарь

  • Accelerated Cost Recovery System — (ACRS) An accounting method whereby the cost of a fixed asset is written off for tax purposes over a prescribed period of time. Instituted by the Economic Recovery Tax Act of 1981, and modified by Tax Reform Act of 1986, the system places assets… …   Black's law dictionary

  • Accelerated Cost Recovery System — (ACRS) An accounting method whereby the cost of a fixed asset is written off for tax purposes over a prescribed period of time. Instituted by the Economic Recovery Tax Act of 1981, and modified by Tax Reform Act of 1986, the system places assets… …   Black's law dictionary

  • CLADR — Class Life Asset Depreciation Range (Business » Accounting) …   Abbreviations dictionary

  • A.D.R. — See alternative dispute resolution Asset Depreciation Range …   Black's law dictionary

  • A.D.R. — See alternative dispute resolution Asset Depreciation Range …   Black's law dictionary