Depletion is an accounting and tax concept used most often in the mining, timber, and petroleum industries.
Rates and other rules for percentage depletion of other specific minerals are found later in Mines and Geothermal Deposits.
Cost depletion is computed by estimating the total quantity of mineral or other resources acquired and assigning a proportionate amount of the total resource cost to the quantity extracted in the period.
By using the units remaining at the end of the year, the adjustment allows for revised estimates of the reserves.
Units are considered sold in the year the proceeds are taxable under the taxpayer's accounting method.