Depletion

   

Definition: Depletion is an accounting treatment to deal with the reduction in the value of natural, non-renewable resources due to gradually "using up" the natural resource. Example of such natural resources include oil, gas, coal, gold, other minerals and timber.
The recording of depletion is a bookkeeping entry similar to depreciation and does not involve the expenditure of cash. As a non-cash expense it is deducted from revenues and thus lowers net income.


   

   

More on depletion.
More on accounting and auditing: Accounting Cycle, Accounts Payable, Accounts Receivable, Amortization, Appreciation, more...



   

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