Cost depletion

Input(s)

$A B$: Adjusted Basis for The Taxable Year (currency unit)

$Q$: Number of Units Sold in That Year (number)

$R_{r}$: Number of Remaining Reserves at the End of the Taxable Year (number)

Output(s)

CD: Cost Depletion (currency unit)

Formula(s)

$$ \mathrm{CD}=\mathrm{AB} *\left(\frac{\mathrm{Q}}{\mathrm{R}_{\mathrm{r}}+\mathrm{Q}}\right) $$

Reference(s)

Mian, M. A. 2011. Project Economics and Decision Analysis Volume 1: Deterministic Models, Second Edition. Tulsa, Oklahoma: PennWell Corporation. Chapter 4, Page: 204.