It is probably true in the case of many land companies, particularly those whose business is not chiefly in the older and larger cities, that there is ever present the knowledge that, while buildings may be depreciating, the land is appreciating. This is true as to the holdings of the majority of well-managed concerns, and the accountant has to show good cause if he insists on writing down the value of buildings why he cannot agree to the writing up of the land.

The average business man usually agrees that losses should be written off as soon as discovered and that no profits should be entered until earned; yet, when the accountant is not willing to regard appreciation of land as a proper offset to the depreciation of the improvement, the owner often has the impression that he is being imposed upon. He fails to realize that correct accountancy does not deprive him of any profits, but merely guards him against self-deception and against possible losses in case values should depreciate, the final result, in any event, depending upon the price actually obtained for the property in question. In this connection it must be noted, however, that the principles set forth above are not held by all authorities. Some accountants believe that if a certain price has been paid for a piece of improved real estate, no depreciation should be shown unless the value decreases.