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 ?
With lower temperature and less supplement of lower-latitude ozone, the Antarctic ozone depletion would become more severe.
Nutrient Depletions allows you to share what you found with your family, friends and patients through an easy in-app email feature.
We assessed column reproducibility by use of 1-way AMOVA (JMP; SAS Institute), examining the runs as the factor of interest to determine the cutoff where albumin depletion efficiency remained >90%.
The Drug-Induced Depletion Handbook reports "the agents used in cancer chemotherapy may have potent negative effects on an individual's nutritional status.
In order to make valid comparisons of soil hydrology among the various crops, soil water depletion and water use for all the crops were calculated between the same set of dates from about May 15 to about September 15 in a given year.
Additions or depletions are similarly calculated as net price times the quantity of additions or depletions.
In addition to depletions growth of 13% for the quarter and 13% y-t-d, core shipments increased 9% for the quarter and 13% y-t-d, and core gross margin improved to 56% from 53% in the prior year.
"Our wholesaler and sales force execution in the quarter propelled us to a record first quarter for depletions," chairman Jim Koch said.
"Our 2% depletions growth in the second quarter was an improvement over the 5% decrease in the first quarter," said Jim Koch, chairman and founder of the Company.
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.
"We reported 2% depletions growth in the fourth quarter," said founder Jim Koch, "bringing depletions growth for the second half of 2008 to 7%, as compared to 10% depletions growth in the first half of 2008.
However, the study's authors say it remains unclear whether the ozone depletions over the last 10 years have actually harmed life in that area.