The conversion of natural resources by mining, cutting. Or pumping usually requires machinery, equipment, and buildings. When the usefulness of these plant assets is directly related to the depletion of a natural resource, their cot are depreciated using the units – of – production method in proportion to the depletion of the natural resource. For example, if a machine is permanently installed in a mine and 10% of the ore is mined and sold in the period, then 10% of the machine’s cost (less any salvage value) is allocated to depreciation expense. The same procedure is used when a machine is abandoned once resources have been extracted. If, however, a machine will be moved to and used at another site when extraction I complete, the machine is depreciated over its own useful life.