What does Depreciation/Depletion mean?
Depreciation/Depletion represents the sum of Depreciation and Depletion. Depreciation represents the amount of expense charged against earnings by a company to write off the cost of a plant or machine over its useful life, giving consideration to wear and tear, obsolescence and salvage value. Amortization may be included in Depreciation when it is not delineated on its own.
Depletion represents a non-cash expense: depletion of depletable fixed assets such as oil reserves, forests or mineral extraction rights. Depletion is an equivalent of depreciation, but is applied to consumable fixed assets or rights on mining assets.
Depreciation/Depletion is usually the largest non-cash expense factored into net income under the Indirect Cash Flow Method.
