Page:Hints About Investments (1926).pdf/154

 stated at cost, because the capital outlay thereon does not expire as it does in the case of wasting assets"; and again on a later page "Freehold land is not a wasting asset." Here at last we have a bedrock fact on high authority; and yet a heretic might suggest that freehold land is an asset which though it may not waste, very often changes in value. To say nothing of the land owned by a mining company, which exhausts it before it has done with it, because this is evidently an exceptional case, even a factory site may have its value seriously affected by the development of improved transport facilities elsewhere, or by a dozen other influences.

Leasehold land is an item which can be definitely calculated because it is known that so much has been paid for the use of it during so many years, at the end of which it will revert to the owner. Here then the directors and auditors have a question of simple arithmetic to work on, and all that they have to do, or to see done, is the setting aside of an annual sum which will wipe out the book value of leasehold land by the date of the expiry of the lease. But even here there is nearly always a necessity for provision, to an extent which is a matter of opinion rather