Silvicultural decisions of the are made according to

Info icon This preview shows pages 26–28. Sign up to view the full content.

silvicultural decisions of the simulation/optimisation are made according to the local forestry laws and recommendations. The fair value option of IAS 16 for bare land was chosen instead of historical cost as suggested by Hermann et al. (2006). The discount rate used here was also 4%. No capital impairment for bare land could be found to be realistic. Government grants were recognised as income when they became receivable according to IAS 41.34. No intangible assets or rights could be found. Harvested biological assets were measured at fair value less estimated point-of-sale cost at the point of harvest. IAS 2 Inventories was applied to harvested produce (Yanou 2001). Costs approximate fair value in the case of forest regeneration according to IAS 41. 24–25. Surprisingly, an entity does not include cash flows for re-establishing biological assets (for example, the cost of replanting trees in a plantation forest after harvest) according to IAS 41.22. However, IFRIC concluded in 2004 that where the restoration obligation creates an additional asset for the entity, it should be capitalised as part of the asset. Where the restoration provision does not result in an additional asset for the entity, the cost should be expensed. Wages and the work of owner family have been based on careful hourly work book-keeping (MARTTI 2008). Both paid work and that of the owner family contribution have been posted applying delivery felling, silviculture, forest regeneration and other forestry work as types of work. The assumed wage compensation of owner family has been 11.70 euros/hour in 2004 and 12.30 in 2005. Both wages and wage compensation have been posted as expenses, but the regeneration costs have been activated. IAS 41 has encouraged distinguishing between mature and immature assets (IAS 41.43, 41.45). The mature assets, the allowable cut, are located in Work in progress of Current assets. The young and middle-aged stands have been located after Land and waters and before Buildings in Tangible Non-current assets as Non-merchantable growing stock. The bare land forms Land and waters in Tangible assets, although Tornator (2008), for instance, is using Property, plant and equipment. The change in the bare land fair value is posted to the Revaluation surplus in Capital and reserves under Equity and liabilities according to IAS 16.39. The changes due to stumpage price and physical change in the growing stock will be disclosed separately as encouraged by IAS 41.51. Additionally, the Change in the value of the growing stock is located as late as possible after Depreciations and before Operating profit, as Tornator does (2008). This arrangement enables disclosure of the Operating margin of the entity, which recognises the transaction-based results only without any fair values. The beginning of the profit and loss statement thus follows the expenditure-revenue theory of the Finnish accounting tradition (see Kettunen 1993 and Pirinen 2005).
Image of page 26

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Working Papers of the Finnish Forest Research Institute 93 27
Image of page 27
Image of page 28
This is the end of the preview. Sign up to access the rest of the document.
  • Spring '17
  • Jane Smith
  • Balance Sheet, The Land, ........., International Financial Reporting Standards, Finnish Forest Research Institute

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern