Series 22: 2.2.2.1. Cost Method

 2.2.2.1.  Cost Method

The cost method divides the cost of the land that holds the mineral or other natural resource by the estimated total reserves. This provides a unit cost of production that is then multiplied by the amount sold (not extracted) in the current tax year. The cost of the land includes any improvements made to enable the extraction of the resource. If the land has been purchased, the cost is reduc