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 ?
Nutrient Depletions allows you to share what you found with your family, friends and patients through an easy in-app email feature.
Ineffective albumin depletion was defined as depletion efficiency of <90%, and calculated as follows:
Nielson (1998) presented a comparison of soil water depletion among canola, crambe, and sunflower.
First quarter 2010 depletions growth benefited from the weak performance in the first quarter of 2009, which was down 6% compared to the first quarter of '08.
He found that when both equatorial stratospheric and sea surface temperatures increased from one summer to the next, ozone depletions in October and November were worse than the year before.
California Table Wines drove Allied Domecq Wines' growth in America, topping 1 million cases in depletions for the second year running and finishing ahead of last year's record showing.
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.
The drastic depletions in the ozone layer allow high levels of ultraviolet radiation to reach Antarctic surface waters (SN: 4/15/89, p.
While depletions of Samuel Adams Boston Lager and Samuel Adams Seasonals grew by 2.
Inside, the depletions reached 70 to 80 percent at that time, sinking even lower in the next two weeks.
The research community is debating two theories to explain the ozone depletions.
As scientists around the world struggleto determine the mechanism that creates the ozone hole in the stratosphere above Antarctica each year, one group says it has found important evidence that chlorine --a by-product of human use of chlorofluorocarbons--is partially responsible for these seasonal depletions of Antarctic ozone.