extracted or sold? I know that when calculating amortization for natural resources, you use the units of activity method. I am, however, very confused with the reason why. I could understand using this method of amortization for a vehicles or equipment because these capital assets depreciate with units of usage (e.g. kilometers driven or hours used). But how does this make sense with natural resources?
Any help is greatly appreciated! Thanks in advance!
Any help is greatly appreciated! Thanks in advance!