Deplete Definition & Meaning

Depletion is an accrual accounting technique used to allocate the cost of extracting natural resources such as timber, minerals, and oil from the earth. Like depreciation and amortization, depletion is a non-cash expense that lowers the cost value of an asset incrementally through scheduled charges to income. Where depletion differs is that it refers to the gradual exhaustion of natural resource reserves, as opposed to the wearing out of depreciable assets or aging life of intangibles.

• Now, we use the $1.00 expense per unit as the basis of our total expense calculation.
• Conceptually, depletion is similar to the depreciation of property, plant and equipment.
• As a result of continued international cooperation on this issue, the ozone layer is expected to recover over time.
• The extremely cold temperatures inside the vortex lead to the formation of PSCs, which occur at altitudes of roughly 12 to 22 km (about 7 to 14 miles).
• Approximately 15% of gross income from oil and gas is tax-free for small investors and independent oil and gas producers.
• The deduction is intended as an incentive for drillers and investors to develop domestic mineral and energy production.

Since the percentage depletion deduction is a flat rate, the resulting tax break often exceeds the cost depletion deduction, thus acting as a sizable subsidy to qualifying energy companies. Oil and gas investments at the wellhead have become one of the most tax-advantaged investments available in the U.S. today due to the depletion allowance. Approximately 15% of gross income from oil and gas is tax-free for small investors and independent oil and gas producers. The rules of oil and gas accounting require that the costs incurred to find, develop, and obtain minerals and oil- and gas-producing properties must be capitalized.

The extremely cold temperatures inside the vortex lead to the formation of PSCs, which occur at altitudes of roughly 12 to 22 km (about 7 to 14 miles). Chemical reactions that take place on PSC particles convert less-reactive chlorine-containing molecules to more-reactive forms such as molecular chlorine (Cl2) that accumulate during the polar night. (Bromine compounds and nitrogen oxides can also react with these cloud particles.) When day returns to Antarctica in the early spring, sunlight breaks the molecular chlorine into single chlorine atoms that can react with and destroy ozone.

Thesaurus Entries Near depletion

In most situations, isotonic crystalloid is the best initial treatment for volume depletion. Balanced crystalloids may be preferable to normal saline in critically ill patients in intensive care and are recommended in patients with sepsis or septic shock. Conceptually, depletion is similar to the depreciation of property, plant and equipment. Upon administration, anti-CD45 monoclonal antibody what is an invoice binds to leukocyte surface-expressed CD45, which may result in the transient depletion of circulating leukocytes including circulating T cell depletion (TCD). Emfolin sodium competes for the folate binding site of the enzyme dihydrofolate reductase, resulting in inhibition of tetrahydrofolate synthesis, depletion of nucleotide pools, and inhibition of DNA, RNA and protein synthesis.

• Emfolin sodium competes for the folate binding site of the enzyme dihydrofolate reductase, resulting in inhibition of tetrahydrofolate synthesis, depletion of nucleotide pools, and inhibition of DNA, RNA and protein synthesis.
• The dollar amount represents the cumulative total amount of depreciation, depletion, and amortization (DD&A) from the time the assets were acquired.
• It requires the method that yields the highest deduction to be used with mineral property, which it defines as oil and gas wells, mines, and other natural deposits, including geothermal deposits.
• Depreciation applies to expenses incurred for the purchase of assets with useful lives greater than one year.

Percentage depletion is a capital cost recovery method that is allowed for nearly all natural resources except timber. Depletion also lowers the cost value of an asset incrementally through scheduled charges to income. Where it differs is that it refers to the gradual exhaustion of natural resource reserves, as opposed to the wearing out of depreciable assets or the aging life of intangibles.

Meaning of depletion in English

The percentage depletion formula requires that gross income be multiplied by the appropriate percentage. There is no dollar limit to the deduction from income from qualified nonrenewable resources. Volume depletion is characterized by a reduction in extracellular fluid volume that occurs when salt and fluid losses exceed intake on a sustained basis. This calculation relies heavily on estimates since we have no idea how many resource units are actually in a reserve.

There is no dollar limit to the total amount of depletion that can be deducted from income from qualified nonrenewable resources. However, percentage depletion can only be taken from a property that has net income (or profits). Percentage depletion is a tax deduction for depreciation allowable for businesses involved in extracting fossil fuels, minerals, and other nonrenewable resources from the earth. During the winter the air over the Antarctic becomes extremely cold as a result of the lack of sunlight and a reduced mixing of lower stratospheric air over Antarctica with air outside the region. This reduced mixing is caused by the circumpolar vortex, also called the polar winter vortex. Bounded by a stratospheric jet of wind circulating between approximately 50° and 65° S, the air over Antarctica and its adjacent seas is effectively isolated from air outside the region.

Ozone destruction continues until the breakup of the polar vortex, which usually takes place in November. Examples of depletion involve the logical expensing of a company’s cost of natural resources such as oil, natural gas, coal, metals, stone, etc. The Internal Revenue Service (IRS) requires the cost method to be used with timber. It requires the method that yields the highest deduction to be used with mineral property, which it defines as oil and gas wells, mines, and other natural deposits, including geothermal deposits.

How to use deplete in a sentence

Beginning in the late 1970s, a large and rapid decrease in total ozone, often by more than 60 percent relative to the global average, has been observed in the springtime (September to November) over Antarctica. Farman and his colleagues first documented this phenomenon over their BAS station at Halley Bay, Antarctica. Their analyses attracted the attention of the scientific community, which found that these decreases in the total ozone column were greater than 50 percent compared with historical values observed by both ground-based and satellite techniques.

Deforestation

Now, we use the $1.00 expense per unit as the basis of our total expense calculation. It would record depletion expense of $8,500 (8,500 trees x $1 per unit) for the year. Chevron Corp. (CVX) reported $19.4 billion in DD&A expense in 2018, more or less in line with the $19.3 billion it recorded in the prior year. In its footnotes, the energy giant revealed that the slight DD&A expense increase was due to higher production levels for certain oil and gas producing fields. Depletion for accounting and financial reporting purposes is meant to assist in accurately identifying the value of the assets on the balance sheet and recording expenses in the appropriate time period on the income statement.

Percentage depletion assigns a set percentage of depletion to the gross income derived from extracting these nonrenewable resources. The deduction is intended as an incentive for drillers and investors to develop domestic mineral and energy production. Human activities have had a significant effect on the global concentration and distribution of stratospheric ozone since before the 1980s. In addition, scientists have noted that large annual decreases in average ozone concentrations began to occur by at least 1980. The largest decreases in ozone took place in the high latitudes (toward the poles), and the smallest decreases occurred in the lower latitudes (the tropics). In addition, atmospheric measurements show that the depletion of the ozone layer increased the amount of UV radiation reaching Earth’s surface.

If a company uses all three of the above expensing methods, they will be recorded in its financial statement as depreciation, depletion, and amortization (DD&A). A single line providing the dollar amount of charges for the accounting period appears on the income statement. For example, if a large piece of machinery or property requires a large cash outlay, it can be expensed over its usable life, rather than in the individual period during which the cash outlay occurred. This accounting technique is designed to provide a more accurate depiction of the profitability of the business.

Other words from deplete

Accrual accounting permits companies to recognize capital expenses in periods that reflect the use of the related capital asset. The percentage depletion method requires a lot of estimates and is, therefore, not a heavily relied upon or accepted method of depletion. If a property recognizes a net loss for any given tax year, percentage depletion cannot be deducted. Without proper assessment and timely resuscitation, volume depletion can lead to circulatory collapse and shock.