Depreciable Asset Bases and Resource Depletion

This section focuses on the amount subject to allocation and the assets that consume it. Depreciation covers tangible long-lived assets; Depletion covers capitalized natural-resource costs as recoverable units are extracted or sold.

The base is not always invoice price. Acquisition costs, directly attributable expenditures, residual value, restoration obligations, tax adjustments, and impairment can alter the amount. For extractive assets, reserve estimates and the split between resource rights, exploration, development, equipment, and inventory are especially important.

Use the asset register, cost-pool policy, reserve report, production records, and applicable tax schedule rather than treating depreciable basis, book carrying amount, and tax basis as synonyms. This section is educational and does not provide accounting, engineering, tax, audit, legal, valuation, or investment advice.

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