The established forestry book keeping procedure

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and communication technologies (ICT). The established forestry book-keeping procedure provides reliable information for the purpose of financial statements. The financial statements have been drawn up using the International Financial Reporting Standards (IFRS) and especially its International Accounting Standards (IAS) 41 - Agriculture for the growing stock and IAS 16 - Property, Plant and Equipment for the bare land. The key IAS notion of ‘fair value’ as the evaluation basis can, in the case of forestry be interpreted loosely as net present value (NPV). The fair value of the growing stock fluctuates annually according to the impact of the net increase and fellings. Both physical and price changes affect the net profit according to IAS 41. The key aspect of the development is the evaluation of the IAS ‘fair value’ of the growing stock, classified as mature and immature biological assets, and their annual changes. The changes due to stumpage price and physical change in the growing stock are also to be disclosed separately. Moreover, the fair value of bare land is also estimated annually for each stand. The purpose of this study is to apply all relevant IAS/IFRS statutes and relevant theoretical contributions to determine whether the international accounting standards (IASs) are applicable in profitability book-keeping for forest holdings in order to support rural entrepreneurship. The structure of the financial statement reports accords to the IAS standards. The applicability of the IAS standards have been tested with the data and technical framework of the profitability book-keeping system of the MTT Economic Research. Keywords accounting, International Financial Reporting Standards (IFRS), profitability, forestry Available at Replaces Is replaced by Contact information Markku Penttinen, Finnish Forest Research Intitute, P. O. Box 18, FI-01301 Vantaa. E-mail [email protected] Other information Lay-out by Maija Heino
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Working Papers of the Finnish Forest Research Institute 93 4 Contents 1 Introduction .................................................................................................... 5 1.1 Agricultural book-keeping farms and forestry ..................................................... 5 1.2 IFRS/IAS ............................................................................................................. 7 1.3 Accounting theories and research traditions ....................................................... 8 1.4 Previous work related to forestry accounting in the IAS/IFRS framework ........ 10 1.5 The objective of the study ................................................................................... 11 2 Material and methods ................................................................................. 12 2.1 Empirical evidence ............................................................................................. 12 2.2 Evaluation methods ............................................................................................ 13 2.3 Calculation solutions .......................................................................................... 15 2.4 Accounting solutions .......................................................................................... 16 3 Results ......................................................................................................... 25 4 Conclusions ................................................................................................. 29 Acknowledgements ......................................................................................... 31 References ....................................................................................................... 32
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Working Papers of the Finnish Forest Research Institute 93 5 1 Introduction 1.1 Agricultural book-keeping farms and forestry There were roughly 68,700 farms with agricultural arable land exceeding one hectare in 2006 in Finland, possessing on average 47 hectares of forest. In all, there are some 443,000 non-industrial private forest holdings with an average of 23.6 hectares of forest land according to the Finnish Forest Research Institute (FFRI 2007). The agricultural profitability book-keeping maintained
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  • Spring '17
  • Jane Smith
  • Balance Sheet, The Land, ........., International Financial Reporting Standards, Finnish Forest Research Institute

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