Valuation huidance of forest properties within valuation standards needed?
Viitanen, Kauko, Simo Hannelius and Markku Airaksinen
Wood and commodities made of it have a worldwide importance. The global forest area consists of 3.9 milliards (Br) of hectares of forestland; which is about a third of the total global land area. In year 2000 the amount of round wood felled was 3.4 milliards (Br) of cubic meters, half of it firewood. The global production of forestry commodities was about one milliard cubic meter in year 2000. The export value of these commodities in world trade was USD 134 000 million and the import value USD 141 000 million. In order to maintain free and unchallenged capital transfers globally it is more and more important for the decision makers to have trustworthy and comparable facts at their disposal. This applies to enterprises and accounting systems (IFRS) as well as different kinds of property valuations (IVS). Our opinion is that present valuation standards pay too little consideration to the valuation of forest properties. We suggest that completely independent and specified valuation guidance should be created for the use of valuation of forest properties. The draft proposal in the paper distinguishes among various property interests and characters that should be recognised, and discusses concepts that should be understood by financial reporting and regulatory authorities, courts, financiers, investors, participants in natural resource transactions, and other users of valuation services involved in forest properties.
Event: XXIII International FIG Congress : Shaping the change
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