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 ?
A limited partner may recover his share of the cost of a particular item of intangible drilling costs that is not represented by physical property through the allowance for depletion. See Q 7845.
Proposition IV: The rate of social re-investments dictate to society an optimal rate of consumption of social capital which basically follows the slack value of the resource depletion constraint.
All samples were assayed in duplicate, and any detected mtDNA depletion was confirmed by repeat analysis in a second run.
The dramatic ongoing depletion of the ozone layer, a natural shield around the earth which filters ultraviolet radiation from the sun, is responsible for a number of serious impacts on human health and the environmental, notably an increase in cases of skin cancer.
"Sugar maple appears uniquely sensitive to acid rain and calcium depletion. Some have speculated that it is a canary in a coal mine--a lot like red spruce, which is also declining."
Ten of these replicates were used as depletion analysis and 10 for performance evaluation.
As per study of Pakistan Wetland Programme (PWP) conducted in Chitral in 2010, only in Baroghil area in north of the district, over 75 per cent of peatlands have undergone total depletion.
The party urged Nigerians to unite in condemnation of the depletion of the ECA by the Buhari administration, 'which has less than five months to leave the governance of our country for good.'
In 1976 atmospheric research mentioned that the ozone layer is being thinned due to the chemicals released by the industries, for instance, chlorofluorocarbon (CFCS).Moreover, the depletion of ozone layer can harm the life on earth badly which causes extreme hotness and flow of glaciers and prevent rain.
The hole in the ozone layer is gradually recovering due to a depletion of the ozone-destroying chemical, chlorofluorocarbons (CFCs), in the atmosphere, according to results of a research by NASA's Goddard Space Flight Center.
In our research we examined ego depletion resulting from prior self-control as an antecedent of goal pursuit.
ISLAMABAD -- The Sub-Committee of Public Accounts Committee (PAC) on Thursday expressed concerns over the depletion of fish stock and stressed for joint efforts to improve the production in coastal areas.