Forest Valuation

In principle, while forest asset valuations could be conducted with a comparable sales approach, the heterogeneity of forests and even in plantations (species, yields, terrain) inhibit trustworthy comparisons even within relatively small geographical regions. Following the industry’s best practices, we typically use the income approach to value forest assets. To achieve this, and thanks to our extensive experience in building the industry’s leading forest simulators and optimisation systems, we use our proprietary software to project discounted cash flows and attain income approach-based value.  

We have adapted our methods to be compatible with the IFRS and GAAP standards. The required inputs for the valuation process include forest inventory data, management objectives and market data. Because of multiple factors, such as location-specific issues, information availability, or reporting requirements, the valuation of companies’ forest assets requires tailoring as well as expert judgement. The depth of each valuation is always mutually agreed upon on a client basis.

We take advantage of our highly automated routines for forest valuations aimed at entities that actively acquire and sell forest assets. Our tools can efficiently process large forest areas, even over hundreds of thousands of hectares, and produce their future harvesting schedules and consequent cash flows. Our services deliver critical information for the clients' due diligence processes in accurately capturing the value of the target forests.

With our tools and processes, forest transaction valuations can be automated to a large extent. We maintain comprehensive market databases, which enable us to provide cash flow analyses on forest assets cost-efficiently and rapidly.

We offer comprehensive due diligence of forest transactions jointly with AFRY Management Consulting.