depletion

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Depletion

A reduction of the value of an asset on a balance sheet that comes about as a result of the physical reduction of the asset's features. For example, there is only so much oil in an oil field. Depletion reduces the value of the oil field in a way related to the amount of oil drilled up over a given period of time. Depletion is used most often with natural resources. See also: Depreciation, Amortization.

depletion

The periodic cost assigned for a reduction in the quantity and indicated value of a natural resource such as a mineral deposit or timber. Thus, depletion indicates an activity such as harvesting or mining a natural resource. See also cost depletion, depreciation, percentage depletion.

depletion

An accounting and tax term referring to deductions made to account for land becoming less valuable because of the removal of natural resources, including timber and geothermal deposits of hot water or hot rocks.

Examples of items eligible for the IRS depletion allowance under 26 U.S.C.§613(b) are

Borax
Marble
Carbon dioxide
Mollusk shells
Clay
Oil and gas
Coal
Potash
Copper
Sand
Gold
Silver
Granite
Shale
Gravel
Slate
Iron
Stone
Iron ore
Sulfur
Limestone
Timber

For more information,see Publication 535,“Business Expenses,”Chapter 10,“Depletion,”available at the IRS Web site,www.irs.gov.

Depletion

The process by which the cost or other basis of a natural resource (for example, an oil and gas interest) is recovered upon extraction and sale of the resource. The two ways to determine the depletion allowance are the cost and percentage methods, both of which are defined elsewhere in this glossary.
References in periodicals archive ?
Using technology and consuming less is the best solution to overcome resource depletion of oil resources.
Nutrient Depletions enhances the quality of patient care by providing a portable reference guide to look up nutrients depleted for your patient's medication regimens.
We describe the efficiency of immunoaffinity-based albumin depletion using spin columns and compare the SELDITOF mass spectra of unfractionated, albumin-bound, and albumin-depleted serum.
We achieved depletions growth of approximately 14% during the quarter, which benefited from an easy comparison to the first quarter '09.
BDN's core services include depletion reporting, retail account data and decision support services.
We also believe that we have experienced lost sales at retail which probably contributed somewhat to the slower growth rate in depletions for the second quarter.
Though it may sound like the plot for a new Arnold Schwarzenegger movie, this idea has been raised by a team of atmospheric scientists who use computer models to explore mthods of stemming the annual ozone depletion over Antartica.
brand, Canadian Club, was down 3 percent in depletions, but still outperformed the category and its primary competition.
In the fourth quarter of 2005, the company said that Samuel Adams brand family depletions grew with increases in seasonals and the Brewmaster's Collection, offsetting weakness in Boston Lager and Light.
Angell predicted severe depletions for 1990 in a paper published in the September GEOPHYSICAL RESEARCH LETTERS.
The drastic depletions in the ozone layer allow high levels of ultraviolet radiation to reach Antarctic surface waters (SN: 4/15/89, p.
Inside, the depletions reached 70 to 80 percent at that time, sinking even lower in the next two weeks.