Oil & Gas
Production Asset Depletion — Units of Production
Recording monthly depletion of the oil & gas asset based on barrels produced.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Depletion Expense (UOP — Oil Properties) | Expense (+) | 450,000.00 | - |
| Accumulated Depletion (Oil Properties) | Contra-Asset (+) | - | 450,000.00 |
💡 Accountant's Note
Unlike straight-line depreciation, oil & gas assets are depleted using UOP: (Cost / Proved Developed Reserves) × Barrels Produced. In a high-production month, depletion is higher; in a low month, it is lower. This matches cost to revenue generation.
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