Biological assets self generating and regenerating

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Herbohn and Herbohn (1999). Biological assets (self-generating and regenerating assets) are shown separately without classification as current and non-current assets (Herbohn et al. 1998). Minimum items on the face of the balance sheet (IAS 1.68): (a) property, plant and equipment; ..., (f) biological assets; (g) inventories; ... and thus biological assets will also be recorded separately. The disclosure required may take the form of a narrative or quantified description (IAS 41.42). An enterprise is encouraged to distinguish between consumable and bearer biological assets or between mature and immature biological assets (IAS 41.43, 41.45). All forestry assets here are disclosed quantitatively distinguished between mature, allowable cut, and immature, the non- merchantable growing stock, and biological assets. An entity must normally present a classified balance sheet, separating current and non-current assets and liabilities. [IAS 1.51]. The allowable cut can be felled immediately and is thus included in the current assets, but the non-allowable cut in the non-current assets. Non-merchantable growing stock belongs to Biological assets and, moreover, may be designated as Non-merchantable biological assets: the allowable cut belongs to Work in progress in Current assets and may be designated as Allowable cut. Note that allowable cut is both product and production machinery at the same time (Keltikangas 1969). Finished products in Current assets stands for felled trees. Bare land belongs to Land and waters (Figure 5). Figure 5. Bare land and the growing stock in the balance sheet and the profit and loss account. (Source: Agrifood Research Finland.) BALANCE SHEET PROFIT AND LOSS ACCOUNT Assets Equity and liabilities NON-CURRENT ASSETS Intangible asset Tangible assets - Land and waters Bare land value Non-merchantable growing stock Allowable cut Change in the fair value of the growing stock Forest land - bare land value Fair value of growing stock - young and middle aged stands - allowable cut Total assets Total equity and liabilities EQUITY Capital Reserves LIABILITIES - Long-term liabilities - Short-term liabilities The impact of changes in stumpage prices on the fair value of growing stock during the accounting period: Removes of price changes from the fair value of the growing stock, which is calculated at current stumpage prices. - Biological assets Investments CURRENT ASSETS Stocks - Work in progress Receivables Financial assets Cash in hand and at banks Sales proceeds Subsidies TURNOVER Variation in stocks (+/-) Other operating income Variable costs Fixed costs (incl. own work) Depreciations OPERATING PROFIT (LOSS) Financial income and expenses PROFIT (LOSS) FOR THE FINANCIAL YEAR The impact of the stumpage price changes on the value of the growing stock REALISED PROFIT (LOSS) Interest claim for equity ENTREPRENEUR’S PROFIT (LOSS) Change in the fair value of biological assets
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Working Papers of the Finnish Forest Research Institute 93 21 Income statement disclosure of the growing stock
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