Presented below is a statement that appeared about Weyerhaeuser Company in a financial magazine.

The land and timber holdings are now carried on the company’s books at a mere $422 million. The value of the timber alone is variously estimated at $3 billion to $7 billion and is rising all the time. “The understatement of the company is pretty severe,” conceded Charles W. Bingham, a senior vice-president. Adds Robert L. Schuyler, another senior vice-president: “We have a whole stream of profit nobody sees and there is no way to show it on our books.”

Instructions

(a) What does Schuyler mean when he says, “We have a whole stream of profit nobody sees but there is no way to show it on our books.”

(b) If the understatement of the company’s assets is severe, why does accounting not report this information?