Depletion term is used in case of intangible assets.

True

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False

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Solution

The correct option is B False
The term 'Depletion' refers to the physical deterioration by the exhaustion of natural resources (ore deposits in mines, oil wells, quarries, timber stands etc.)
For the purpose of intangible assets, the term 'Amortization' is used. It refers to the economic deterioration by the expiation of intangible assets such as patents, goodwill etc.

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Similar questions

Amortization of intangible assets and depletion of natural resources is conceptually similar to depreciation of constructed assets. Is the statement correct?

Q. Which of the following terms is used to describe the process of writing down the long-term investments in intangible assets?

Q. Match List-I with List-II and select the correct answer using the codes given the lists.

List-I	List-II
I. Amortisation	(a) Diminition in the life of the assets due to excessive use
II. Depreciation	(b) Exhaustion of natural resource
III. Depletion	(c) Expiration of tangible assets
IV. Obsolescence	(d) Expiration of intangible assets
	(e) Economic deterioration due to improved inventions

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