Legal Dictionary of Pakistan
Quick lookup for English, Urdu, and Latin legal terms used in Pakistani jurisprudence.
Depletion
n. An emptying, exhausting, or wasting of an asset, esp. of a finite natural resource such as oil. - deplete, ub. - depletive, adj.
cost depletion
Oil & gas. The recovery of an oil-and-gas producer's basis (i.e., investment) in a producing well by deducting the basis proportionately over the producing life of the well. Treas. Reg. ยง 1.611-2. "Under cost depletion, the taxpayer in an oil and gas property deducts the basis in the property from the income as oil and gas are produced and sold. Cost depletion is calculated by a formula ... [that] relates the recovery of the taxpayer's investment to the proportion that the current unit sales of oil and gas bear to the total anticipated sales of oil and gas from the property. The investment is recovered ratably over the life of the reserves." John S. Lowe, Oil and Gas Law in a Nutshell 353 (3d ed. 1995).
depletion allowance
a tax deduction for the owners of oil, gas, mineral, or timber resources corresponding to the reduced value of the property resulting from the removal of the resource.
depletion reserve
Accounting. A charge to income reflecting the decrease in the value of a wasting asset, such as an oil reserve.