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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary