The treatment of rentals from mines pertains to the accounts of mining companies rather than to those of a real estate concern, and need not be considered in great detail at this time. As has already been stated, the periodic payments are not, strictly speaking, rents, but are a consideration for something pertaining to the natural land, which may be the coal or other mineral deposits under the surface, or the natural product of the soil above the surface, as in the case of timber lands; or the removing of certain parts of that product, as in the case of turpentine and rosin, tapping for maple syrup, cutting camphor trees, etc.
The value of all such lands is composed of (1) the value of the deposit or growth; (2) the residual value of the land after such deposit or growth is removed.
Inasmuch as the rents or royalties paid in these cases are the consideration given for the outright purchase and consumption of principal, they should not be credited, in the first instance, to Profits, but to Real Estate. When they become equal to the cost of the property, all further rents may properly be credited to Profits.