International Conference   BUILDING INSIGHTS OF MANAGERIAL ECONOMICS AND ACCOUNTING TOWARDS SUSTAINABLE FOREST MANAGEMENT Ukrainian National Forestry University, Lviv, Ukraine May 17 � 19, 2007   IUFRO Unit 4.05.00 - Managerial Economics and Accounting IUFRO Unit 4.05.01 - Managerial, social and environmental accounting IUFRO Unit 4.05.02 - Managerial economics

Fair Value Accounting of Biological Assets regarding to IAS 41 and Emission Reduction Revenues Obtained by Silvicultural Assets: The Case of Precious Woods Group

Klaus Wallner

Chair of Forest Economics, Technische Universität München, Germany

Email: klaus.wallner@tum.de

This case study assesses the financial statements of the Precious Woods Group to focus on two new types of revenue streams in forestry business: fair value gains and revenues from emission reduction activities. The Precious Woods Group � one of their core activities is the reforestation of degraded land in Central America � meets the requirements for such a case study because they are applying the fair value method to assess their forests and the selling of CFT�s (Carbon Financial Instruments) generated by their forests. With reference to the fair value accounting of biological assets (IAS 41 � Agriculture) and the revenue of emission reduction activities generated by biological assets the financial statements from 2003 till 2006 were evaluated. The study tries to highlight the importance of these two types of revenues for forestry business in the upcoming years.

Keywords: Forestry accounting, international accounting standards, emissions trade, carbon credits

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