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.
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References in periodicals archive ?
Cost depletion works similarly to depreciation in that the taxpayer's investment in the property is recovered on an annual basis using a determined formula (Regs.
IRS allows oil and gas company a bulk sale exception
An upper sustainability constraint on resource depletion ensures lack of resource over-depletion beyond the socially efficient rate, and a lower sustainability constraint ensures availability of critically needed input resources for an efficient production level.
Social optimality with resource depletion: an investment project valuation model
They compare coupled carbon-climate models with and without ozone depletion and find that including ozone depletion produced a significant reduction in Southern Ocean carbon uptake, in good agreement with observed trends.
Ozone depletion reduces CO2 uptake of Southern Ocean
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.
Quality control of serum albumin depletion for proteomic analysis
Biopsy samples obtained from the gut and respiratory mucosa during chronic infection demonstrated profound mucosal CD4 T cell depletion in all SIV-infected animals, at levels similar to those described in the context of HIV infection.
Severe depletion of mucosal CD4 T cells in AIDS-free simian immunodeficiency virus-infected sooty mangabeys
I don't know anyone who seriously believes that broad-scale liming is a viable solution to calcium depletion," Schaberg says.
Syrup skips a beat: as the world warms, our southernmost sugar maples are feeling the effects, and that's especially troubling for one Virginia town
Studies have shown that inhibition or depletion of RLIP76, a glutathione-conjugate transport protein that helps cells defend themselves against toxicants, causes apoptosis in a number of cancer cell types.
Inhibition of RLIP76 causes complete regression of melanoma in mice
2 fuel oil gave slightly higher depletion rates and slightly lower performance.
The impact of test site and oil content on the performance of pentachlorophenol-treated wood
As world oil goes into depletion mode very visibly after 2008 at about 6 percent per year, the world must improve use efficiency each year by 3 percent, increase the amount of long term renewable, wind and solar, energy produced, and take three percent from current uses to provide the power to accomplish the first and second three.
Oil shock
The limiting factor here is not the depletion of glycogen stores per say--it is the accumulation of lactic acid, which is the body's by-product of burning fuel.
An overview of energy sources
In addition to providing unit holders with income from the working property, the trust passes through proportionate shares of any depreciation or depletion deductions or tax credits to which the underlying property is entitled.
Tax benefits of royalty trusts: another way of investing in commodities
We investigate the impact of health on wealth depletion of African American, Hispanic, and non-Hispanic white elders.
Unequal effects of elders' health problems on wealth depletion across race and ethnicity

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