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What is the name of the process by which costs of a natural resource deposit are...

What is the name of the process by which costs of a natural resource deposit are removed from the asset account as the resources are produced?

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Answer #1

The process by which costs of a natural resource deposit are removed from the asset account as the resources are produced, is termed as Depletion.

As a natural resource is extracted, natural resource is reduced. Since with each extraction, the deposits of natural resource get reduced, hence it is termed as Depletion of resources.

The process of allocating the cost of the natural resource to each period in which the resource is used, is known as Depletion.

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