An accounting technique for calculating the depreciation of tangible assets on the basis of the estimated-life classifications into which the assets are placed. The Economic Recovery Act of 1981 initiated ACRS with the goal of making investments more profitable by sheltering large amounts of income from taxation during the early years of an asset's life. The initial law established classifications of 3, 5, 10, and 15 years; these classifications were subsequently modified in order to reduce depreciation and increase the government's tax revenues. The classification into which an asset is placed determines the percentage of the cost potentially recoverable in each year. See also Modified Accelerated Cost Recovery System.