The Australian Health Services Research Institute (AHSRI), University of Wollongong, was commissioned by the Commonwealth Department of Health (the Department) in August 2017 to undertake the ‘Resource Utilisation and Classification Study’ (RUCS). This is the first of a series of reports that will present the results of the body of work completed as part of the overall RUCS program. This report (Report 1) presents the recommended classification, known as the Australian National Aged Care Classification (AN-ACC). The key elements of the AN-ACC development process, including the sampling methodology, clinical stakeholder consultations, and the data collection and analysis methods are outlined. The final section of this report discusses key classification-related issues that will be critical to the successful implementation of the AN-ACC across the Australian residential aged care sector.