FTI started the year with a net worth of ¢200,000 of initial capital. At year end, as Section 2.1, “Fast Trans Inc. 1850 Annual Report” shows, the Net Wealth was ¢49,157. This is a drop of ¢150,843 in the accounting worth of the firm. This seems very odd when the Operation Loss for 1850 was only ¢-1,241.

the explanation is in the very conservative accounting standards of Whalesland. Whalesland accounting principles call for Construction costs to be expensed immediately even thought the firm will benefit from the construction work for many years.

As shown in Section 2.1, “Fast Trans Inc. 1850 Annual Report”, the ¢143,539 in construction cost - roads, track, depots - are an immediate reduction in the Net Wealth of the firm. Thus the largest expenditure for the year eats up over 70% of the book Net Wealth of the FTI. We believe this is too conservation. So in the CEO statement we will always provide an accounting note showing the combined Net Wealth and total investment in construction.

Accounting Note: Combined Net Worth and total Construction Cost to date is: ¢187,058.

I believe this combined figure, although still conservative, presents a better picture of the book value of the firm.