Final answer:
The major difference between depreciation and depletion is that depreciation is for tangible fixed assets like machinery, reflecting their wear and tear, while depletion is used for natural resources like minerals, based on the amount consumed.
Step-by-step explanation:
The major difference between calculating depreciation and depletion relates to the type of asset being accounted for. Depreciation is used for apportioning the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or other declines in value. On the other hand, depletion is a method of allocating the cost of natural resources, like minerals or timber, as these resources are consumed or harvested.
While both are systematic methods of cost allocation and part of non-cash expenses, depreciation typically applies to fixed assets like machinery, equipment, and vehicles, whereas depletion pertains to natural resources. The method of calculation can also differ; depreciation often uses techniques such as straight-line or declining balance methods, while depletion may use a units-of-production method that is based on the quantity of resources extracted during the period.