Depletion Legal Meaning and Definition

Here is a simplified definition of the legal term Depletion.

Depletion (noun)

1. The act or process of decreasing or using up something, usually referring to a natural resource. This can happen through consumption, decay, or other forms of utilization.

2. In legal and accounting contexts, 'depletion' is also used to refer to a method of cost accounting for natural resources (such as minerals, timber, oil and gas) that allows businesses to make tax deductions for the decreasing value of the resource as it is 'depleted' or used up. These deductions offset the cost and loss of revenue that comes from the eventual exhaustion of the resource.