The treatment of depletion for natural resources differs from the treatment of depreciation for property, plant and equipment in all of the following ways EXCEPTSelect answer from the options belowthe depletion base per unit of a natural resource needs to be revised whenever the estimated total units of production changes.natural resource assets are depleted even though they are not held for sale.depletion expense for natural resources is considered an asset when it is first recorded.natural resource assets are depleted as they are used--so the asset essentially becomes smaller.
Question
The treatment of depletion for natural resources differs from the treatment of depreciation for property, plant and equipment in all of the following ways EXCEPTSelect answer from the options belowthe depletion base per unit of a natural resource needs to be revised whenever the estimated total units of production changes.natural resource assets are depleted even though they are not held for sale.depletion expense for natural resources is considered an asset when it is first recorded.natural resource assets are depleted as they are used--so the asset essentially becomes smaller.
Solution
The statement that does NOT differentiate the treatment of depletion for natural resources from the depreciation for property, plant, and equipment is: "natural resource assets are depleted as they are used--so the asset essentially becomes smaller."
This is because both depreciation and depletion are methods of allocating the cost of an asset over its useful life. In the case of property, plant, and equipment, this is referred to as depreciation. The asset's value decreases over time due to wear and tear, age, or obsolescence.
On the other hand, depletion is used for natural resources like timber, minerals, and oil. As these resources are extracted or used, the asset's value decreases - it 'depletes'.
So, in both cases, the asset's value decreases as it is used, which is a commonality between depreciation and depletion, not a difference.
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