DEPLETION Definition

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DEPLETION is the process of cost allocation that assigns the original cost of a natural resource to the periods benefited. For example: a mining company purchases mineral rights to a deposit for $5 million for a period of ten years. The cost of the natural resource, $5 million, will be depleted over the ten years of the benefit; i.e., it is the physical exhaustion of a natural resource (e.g., timber, oil and coal).

Learn new Accounting Terms

BLUE SKY LAW is a law providing for state regulation and supervision of the issuance of investment securities.

CFO to DEBT see CASH FLOW / CURRENT PORTION OF LONG TERM DEBT.

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