The statement that follows about Timber Company appeared in a financial magazine: The land and timber holdings are now carried on the company's books at a mere S100 million (U.S.). The value of the timber alone is variously estimated at $1 billion to $3 billion and is rising all the time. The understatement is pretty severe, conceded company management, who noted, "We have a whole stream of profit nobody sees and there is no way to show it on our books."
Instructions
Act as an analyst and discuss the financial reporting issues. Assume that this is a public company.