It is not unusual to engage expert appraisers to value lands, and these values are frequently shown on balance sheets in memorandum form. The auditor should compare such certificates with the property ledger, if he is to certify that these valuations apply to the property shown on the books he is auditing. It must always be borne in mind that the only rule to follow, and one to which there are few exceptions, is that which requires the books to show always the actual cost of property. (See Chapter X (Property Costs. Section 56. The Elements Of Cost).)

Should values appear to have depreciated, it is sometimes wise to open a depreciation account similar to the Mortgage Depreciation account, in which to carry temporarily the apparent depreciation. Should actual values be known to be less than the book value so that there is no reasonable hope of avoiding a loss, ordinary good management would insist that the loss be allowed for on the books either by charging the loss direct to Profit and Loss account, or through a Depreciation account, a portion of which can be written off to Profit and Loss each fiscal period.