Cost Segregation is the process of classifying personal property assets that are grouped with real property assets and separating out personal assets for tax reporting purposes.  This process can be utilized for new construction and renovation of buildings, as well as, newly acquired properties.  An Engineer studies the property and develops a report to detail the method decisions, and results of the study.  The classifications are applied to the federal tax depreciation schedules.  These classifications can significantly accelerate item depreciation from a 39-year schedule down to a 5-year schedule in some cases.  This reclassification refers to Section 1245 property with shorter useful lives for depreciation purposes, rather than the useful life found in Section 1250 property.  Below is great sources of information to thoroughly explain this process and it's benefits:  

Journal of Accountancy: Detailed explanation of Cost Segregation

Accounting Today: Opinion on benefits of cost segregation studies