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    Definition of Depletion and Flaws in Computing It

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    What is depletion and is it an art form or an exact science?

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    Depletion is a financial accounting method to allocate the cost of natural resources removed from the earth. Unlike depreciation, which assumes that an asset "wears away" based upon time, depletion assumes that the resource is finite and bases the expense on the portion of the asset extracted or sold ("Depletion", 2014). Depletion per unit is computed by dividing the ...

    Solution Summary

    This solution discusses what depletion expense under generally accepted accounting principles is and whether it can be accurately estimated.