Forest valuation

valuation1Carrying out a forest valuation requires knowledge of what there is in the forest (forest inventory information), knowledge of what the future expectations might be for that forest (yield models), understanding of the market prices, costs and returns that might be achieved, and knowledge of the forestry business operations. Further, it requires adoption of an appropriate valuation process and a method considering the actual purpose of forest valuation and type of the asset being valued. The growing stock is valued in its present location and condition excluding any increases in value due to e.g. larger investments in silvicultural activities or replanting of harvested areas. This means that the valuation period is one rotation, allowing the trees to reach maturity, based on their rotation age, where after they are harvested without any new investments into replanting. [Read more…]