Skógræktarritið - 15.05.2001, Side 205

Table I. Example of the division of cost centres and types of costs in cost account-
ing in farm forestry (Hyttinen et al. 1997, pp 77-83).
Cost centres Types of costs
• Harvesting; • Regeneration; • Cleaning, pruning and pre-commercial thinning; • Protection; • road construction; • forest improvement; • administration; • taxes and fees; and • other cost • material; • wages; • social costs; • deprecations; • administration; • contractors; and • owners own work.
Table 2. Example of an information needs for profit and loss accounting ('income
statement' in the US) for private forestry (see Aho and Rantanen 1994, Committee
forcorporate analysis 1995, Laitinen 1992, Hyderetal. 1994)
+ Stumpages sales revenue
+ Delivery sales revenue
+ Other sales revenue from wood
Sales adjustment items
1. TIMBER SALES REVENUE
+ Sales revenue from other than wood
Sales adjustment items including the value added tax (VAT)
2. NETTURNOVER
Variable costs
Marketing costs
Harvesting costs
Silvicultural costs exceeding (-) or undercutting (+) the reserve for regeneration
± Change in the reserve for regeneration
Other variable costs
3. GROSS MARGIN ON SALES (MARGIN AFTER VARIABLE COSTS)
Fixed costs
4. OPERATING MARGIN
+ Interest income
Interest expenses
Direct taxes
Ordinary other expenses
+ Ordinary other income
5. INCOME BEFORE DEPRECIATIONS AND EXTRAORDINARY ITEMS
Depreciation
6. NET PROFIT (LOSS)
Extraordinary expenses
+ Extraordinary revenues
7. OVERALL RESULT
± Increase/decrease of reserves
± Increase(-)/decrease(+) depreciation
Income taxes
8. PROFIT (LOSS) OF THE PERIOD
Adjustment of net interest (±)
+ Change in the value of standing timber (±)
Value of owner’s own work
9. ADJUSTED PROFIT OF THE PERIOD
simplistic, but not, however, suf-
ficient for accurate assessment of
the overall profit of a farm
forestry enterprise. Changes in
the value of the growing stock,
forest owners' own work and
joint costs between agriculture
and forestry, at least, should be
taken into consideration to eval-
uate the changes in the current
assets value (Niskanen 2000,
Niskanen and Hyttinen 2000,
Niskanen and Sekot 2000).
A simplistic system for data col-
lection and analysis for total econ-
omy of the farm would separate
the forest from the owner's other
entities. However, as in practise
these entities often form a single
enterprise and they share many
resources such as funds, debts,
expenses and fixed assets, it is
sometimes more practical to
jointly assess the various entities
of a farm forest enterprise.
Discussion and conclusions
Monitoring of the economics of
farm forestry is needed primarily
to assess the profitability of forest-
ry as well as the farm level impacts
of the changes in economic and
political environments. The most
recent changes that have or will
likely impact on the economics of
farm forestry include Agenda 2000,
structural development policies,
demands for sustainable forestry,
changes in national forest poli-
cies, forest certification require-
ments and possible changes in
EU’s Common Agricultural Policy.
The basic problem here is that the
farm level impacts of these
changes are not possible to esti-
mate without a methodological
sound monitoring system.
In order to be able to achieve a
wide application of the principles
of accountancy networks, the re-
quirements of various stakehold-
ers have to be considered. In do-
ing this, it becomes more possi-
ble than previously to provide
information on key economic
issues for forest owners, forest
owners associations, forest advi-
sory organisations, as well as
policy makers and researchers by
adopting and implementing the
presented farm forestry monitor-
ing principles.
As described in Niskanen and
Hyttinen (2000), an example of a
well functioningaccounting net-
work is Farm Accountancy Data
Network (FADN), where approxi-
mately 58,000 agricultural hold-
ings in the EU member countries
are systematically surveyed. As the
FADN network has a high coverage
of farms in the sample, it logically
provides a basis for developing
the farm forestry accounting sys-
tems in a generic manner.
As the FADN was originally
developed to provide monitoring
information for Common Agri-
cultural Policy (CAP) implementa-
tion, the ability of the FADN to
provide information on non-agri-
cultural income like forestry is
limited. Often farms with forestry
activities are excluded from the
FADN farm samples, or revenues
SKÓGRÆKTARRITIÐ 2001 l.tbl.
203