Modified Accelerated Cost Recovery System (MACRS)

CFA Level II
#1

I know we dont need to memroize the table, but can someone please explain it? It basically tells you how much to depreciate?

Why are assets classified in 3, 5, 7, and 10 year classes? What if an assets live is not one of those years?

Anything would be helpful!

Thanks!

#2

I think it’s basically double accelerated method except that you half the depreciation in the first year (taking middle value since we dont know when the assets are purchased).

#3

I think they are speaking very simply and will only test on the 3, 5 , 7 and 10 year views and likely a 39-year useful life building.