Which of the following is included in the calculation of depletion for natural resources?

Depletion refers to the allocation of the cost of natural resources over their useful life, similar to depreciation for tangible assets. In calculating depletion, it is essential to include all relevant costs that are necessary to develop the resource for extraction. This includes extraction costs, which are necessary for the actual removal of the resource from its natural environment, the cost of the land where the resource is located, and any restoration costs that may be incurred to return the land to its original state after extraction is complete.

Including the combination of extraction costs, land price, and restoration costs ensures that the depletion calculation accurately reflects the total investment made in obtaining and utilizing the natural resource. This comprehensive approach allows for a better representation of the asset's consumption over its useful life, aligning with the matching principle of accounting, which says expenses should be recognized in the same period as the revenues they help to generate. Thus, incorporating all these elements leads to a more accurate and fair representation of financial performance in relation to natural resources.