The depletion associated with extracting copper from a mine will be reported on the statement of financial position if the company has not yet sold the copper.

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Depletion is a method of cost allocation used in accounting for mining resources. It represents the reduction in value of the mineral deposit as it is extracted and is reported on the statement of financial position as an asset despite not yet selling the copper. Once the copper is sold, the depletion cost is transferred to the income statement as part of the cost of goods sold.

The Depletion Associated with Extracting Copper from a Mine Will