Depreciation, depletion and amortization (DD&A) are accounting methods that allow companies to gradually use up resources that have economic value.
Depreciation refers to the cost of a tangible asset, depletion to the cost of extracting natural resources, and depreciation to the deduction of an intangible asset.
The use of all three spending strategies is usually associated with the acquisition, exploration and development of new oil and natural gas reserves.
Depreciation and amortization expenses can be found in the company’s net income statement.