Mondi Limited (2011)
Notes to the combined and consolidated financial statements for the year ended 31 December 2011 [extract]
1 Accounting policies [extract]
Agriculture
Owned forestry assets
Owned forestry assets are measured at fair value, calculated by applying the expected selling price, less costs to harvest and deliver, to the estimated volume of timber on hand at each reporting date. The estimated volume of timber on hand is determined based on the maturity profile of the area under afforestation, the species, the geographic location and other environmental considerations and excludes future growth. The product of these is then adjusted to present value by applying a market related pre tax discount rate.
Changes in fair value are recognised in the combined and consolidated income statement within ‘other net operating expenses’.
At point of felling, the carrying value of forestry assets is transferred to inventory.
Directly attributable costs incurred during the year of biological growth and investments in standing timber are capitalised and presented within cash flows from investing activities in the combined and consolidated statement of cash flows.