Stora Enso has decided to start using a valuation method for its forest assets in the Nordics based on market transaction data and change the accounting policy from the fourth quarter of 2020 onwards.
Preliminary estimations, based on transactions in those areas in which Stora Enso has forest land, indicate that the value of the group’s forest assets, including leased land, will be between EUR 6.5 billion and EUR 7.0 billion, compared with the end of Q3/2020 book value of EUR 5.4 billion.
The review of the fair value will be completed during the fourth quarter and will take into account also the latest transaction prices.
Forest assets are defined as standing growing trees and the related forest land.
From the fourth quarter of 2020 onwards, forests assets in Sweden will be valued by using a market approach method based on the forest market transactions in the areas where Stora Enso’s forests are located.
For the Finnish forest assets (through Stora Enso’s 41% ownership in Tornator), the market approach is not considered a reliable valuation method as the market data is not available with enough details, for example in terms of forest cubic meters of the traded estates.
As a result, there is no change in valuation method for biological assets.
For the plantation forests, there will not be any change in the valuation method as there is no reliable market transaction data available.