natural resource

Examples of natural resource in the following topics:

• Special Considerations for Acquisition and Depletion of Natural Resources

  • Resources supplied by nature are subject to special accounting conventions to calculate cost and depletion.
  • Resources supplied by nature, such as ore deposits, mineral deposits, oil reserves, gas deposits, and timberstands, are natural resources or wasting assets.
  • Then assign this total cost to either the cost of natural resources sold or the inventory of the natural resource still on hand.
  • Carson Fall in Mount Kinabalu, Malaysia is an example of an undisturbed natural resource.
  • Define a natural resource and how to properly account for its depletion

• Recoverable Reserves

  • Recoverable reserves are the amount of a natural resource present and their value is used to compute the resource's depletion expense.
  • Natural reserves supplied by nature, such as ore deposits, mineral deposits, oil reserves, gas deposits, and timber stands, are natural resources or wasting assets.
  • Natural resources represent inventories of raw materials that are consumed (exhausted) through extraction or removal from their natural setting (e.g. removing oil from the ground).
  • Businesses that are involved in the recovery of natural resources, such as mining, growing timber, and extracting petroleum will incur costs related to the resource recovery.
  • The natural reserves recovered involve several costs related to acquisition, exploration, development, and restoration of the natural resources.

• Depletion Base

  • The depletion base is the total cost of a natural resource and includes acquisition, exploration, development, and restoration costs.
  • Depletion is a method of recording the use of natural resources over time.
  • Industries involved in mining, timber, petroleum, and the extraction or use of natural resources are the types of businesses most affected by depletion.
  • The depletion base is the total cost of the natural resource.
  • This is an accounting method by which costs of natural resources are allocated to depletion over the period that make up the life of the asset.

• Resource Cost Write-Off

  • Assets that are natural resources, which are used throughout the course of business, are subject to periodic depletion.
  • When natural resources have their value reduced to zero they are written off.

• Types of Long-Lived Assets

  • Intangible assets includes non-physical resources and rights that a firm deems useful in securing an advantage in the marketplace.
  • Fixed assets include asset land, buildings, machinery, furniture, tools, IT equipment-- e.g. laptops-- and certain limited resources-- e.g. timberland and minerals.
  • Land, natural resources, buildings, furniture, equipment, and machinery are included in this category.

• Accounting Perspectives on Long-Lived Assets

  • The same goes for natural resources.

• Fundamental Concepts in Accounting

  • Identifies the economic resources of an enterprise, the claims to those resources, and the effects that transactions, events, and circumstances have on those resources.
  • Materiality, only items material in amount or in their nature will affect the true and fair view given by a set of accounts.

• Defining Accounting

  • The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in selecting the information that is relevant to the user.
  • Because there is a natural season to farming and herding, it is easy to count and determine if a surplus had been gained after the crops had been harvested or the young animals weaned.

• Efficiency Metrics

  • Efficiency ratios for inventory measure how effectively a business uses its inventory resources.
  • Efficiency ratios for inventory are used to measure how effectively a business uses its inventory resources in comparison to its industry or competitors.

• Internal Controls

  • Inventory internal controls ensure that a company has sufficient resources to meet its customers' needs without having too much goods.
  • In short, inventory internal controls are meant to ensure that a company always has sufficient resources to produce and sell goods to meet its customers' needs without having oversupply.
  • Goods and resources of the same or similar type should be kept in the same general area of the warehouse to minimize confusion and to ensure accurate counts.