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Depletion

• An equivalent of Depreciation for oil and gas reserves; an allowance that reduces taxable income.

 
 Embedded terms in definition
 Depreciation
Income
Taxable income
 
 Referenced Terms
 Noncash charge: A cost, such as depreciation, Depletion, and amortization that does not involve any cash outflow.

 Operating margin: Measures the percentage of each sales dollar remaining after all expenses associated with producing and selling the product and operating the company are deducted.A Value Line measurement defined as operating earnings (before deduction of Depreciation, Depletion, Amortization, Interest, and income tax) as a percentage of sales or revenues. See also: Value Line Financial Strength.

 Wasting asset: An asset which has a limited life and thus, decreases in value (depreciates) over time. Also applied to consumed assets, such as gas, and termed Depletion. Is a derivative instrument that may expire worthless after a stated time or event. Options, Rights, and Warrants are three wasting assets.

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