The calculations used mela a finnish forest

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The calculations used MELA, a Finnish forest management planning software package, (Siitonen et al. 1996, Redsven et al. 2004). The MELA system consists of a stand simulator and a linear optimisation package. The stand simulator is based on individual tree models (see Hynynen et al. 2002, Nuutinen et al. 2005, 2006, Redsven et al. 2004, 2007). The simulator part automatically creates a finite number of feasible alternative management schedules for each stand. The linear optimisation (programming) package in is the JLP (Lappi 1992). The growing stock can be perceived both as means of production and product in the accounting framework (see Keltikangas1969). The disaggregation of the value of the growing stock in the assets of the balance sheet requires a special calculation, which distinguishes the proportion of the immediately merchantable growing stock from the remaining growing stock. This split can be performed by the allowable cut calculation of MELA, which maximises the immediate cutting opportunity (the so-called cutting potential). The remaining proportion of the growing stock consists of the plantings, young, and middle-aged stands, which contain no merchantable wood. In the balance sheet, the growing stock which can immediately be cut according to the forestry law, the allowable cut by roundwood assortment belongs to ‘Work in progress’ of Stocks in the Current assets. The remaining portion of the value of the growing stock belongs to the ‘biological Figure 4. The value change in the growing stock divided into volume and stumpage price changes (Penttinen et al. 2004). 0 5 10 15 20 25 30 35 40 MELA RSU A MELA RSU B MELA SMU A MELA SMU B MELA no cuttings A MELA no cuttings B Sum- value B Sum- value B 1 000 Value change due to physical change Value change due to stumpage price change
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Working Papers of the Finnish Forest Research Institute 93 15 asset’ in Non-current assets as an item called ‘Forest growing stock’. The bare land belongs to Land and water areas in Tangible assets of Non-current assets. The allowable cut calculation yields the volume of the merchantable growing stock as well as the allowable cut output by roundwood assortment. The allowable cut calculation is based on a two- year calculation period, and the hypothetical felling is placed in the middle of the period. When the NPVs of the first planning period are maximised, the net incomes of the future periods are also taken into consideration. The allowable cut can also be calculated by maximising the net income of the first period and ignoring the impact of the net income of the future periods. The annual calculated profit of a forest enterprise according to IAS/IFRS consists of three parts: (i) The transaction-based realised net profit – the difference between felling and other incomes and expenditures – required to produce them, (ii) timber balance change, i.e., the change in the growing stock caused by volume growth and value growth from pulpwood to log, and (iii) the change in the growing stock value caused by changes in stumpage prices (cf. Hyder et al. 1999).
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  • Spring '17
  • Jane Smith
  • Balance Sheet, The Land, ........., International Financial Reporting Standards, Finnish Forest Research Institute

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