HELSINKI, Oct. 20, 2020 /PRNewswire/ -- 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. Deferred tax liability will be recognised based on the
difference between the forest assets' book value and their value
for tax purposes in the same manner as currently.
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.
Therefore, forest land, currently accounted at cost, will be
measured using the revaluation method and this is considered as a
change in accounting policy. In Sweden, reliable market transaction data is
available and provides a more transparent and observable valuation
basis.
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. However, Stora Enso's share of the forest
land, currently accounted at cost, will be measured in Stora Enso's
books by using the revaluation method.
For the plantation forests, there will not be any change in the
valuation method as there is no reliable market transaction data
available. Plantation forest land will continue to be accounted at
cost and will be classified as a separate asset class as compared
to Nordic forest land to reflect the different nature, usage and
characteristics. The main difference is the short-term growing
cycle of 6-12 years in plantations versus the long-term growing
cycle of 60-100 years in Nordic forests. There are also differences
in regeneration methods, forest management and use of the assets
for other purposes.
Most of the change in the value of forest assets relates to
land. The revaluation of land, net of deferred taxes, will be
reported in Other Comprehensive Income. The revaluation of
biological assets is expected to be recognised as a positive
non-operational fair valuation item, together with the related
deferred tax impact, in the Income Statement of the fourth quarter
of 2020.
Part of the bioeconomy, Stora Enso is a leading global provider
of renewable solutions in packaging, biomaterials, wooden
constructions and paper. We believe that everything that is made
from fossil-based materials today can be made from a tree tomorrow.
Stora Enso has some 25 000 employees in over 30 countries. Our
sales in 2019 were EUR 10.1 billion.
Stora Enso shares are listed on Nasdaq Helsinki (STEAV, STERV) and
Nasdaq Stockholm (STE A, STE R). In addition, the shares are traded
in the USA as ADRs (SEOAY).
storaenso.com
For further information, please contact:
Ulrika Lilja
EVP, Communications
tel. +46-72-221-9228
Investor enquiries:
Ulla
Paajanen
SVP, Investor Relations
tel. +358-40-763-8767
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