Final answer:
Depletion is the cost recovery method for natural resources.
Step-by-step explanation:
The cost recovery of the capital investment in natural resources is referred to as depletion.
Depletion is an accounting method used to allocate the cost of natural resources to the periods in which they are extracted and sold. It is commonly used for exhaustible resources such as oil, gas, minerals, and timber. It helps to match the revenue earned from the resource extraction with the associated costs.
For example, if a company invests in a timber forest, the cost of purchasing the forest can be allocated and deducted over the period of time the timber is harvested and sold. This ensures that the cost of the investment is recovered and recognized in the appropriate accounting periods.