Incorporating your forest into Forestia, a jointly owned forest

The value of forest assets is determined based on commonly used calculation principles. These principles are available to anyone, and the valuation method is always the same to ensure the equal treatment of all shareholders. The share of the jointly owned forest belonging to a new member is calculated based on up-to-date forest resource data, by comparing the value of the assets to the corresponding value of the jointly owned forest.

The administrative board of the jointly owned forest decides on the incorporation of a new area according to the principles approved by the partnership. When the jointly owned forest receives new shareholders, the shares of all shareholders are recalculated.

Areas are incorporated against shares in the jointly owned forest, based on a mutual agreement between the new shareholder and the jointly owned forest. This agreement specifies the incorporated area, the corresponding share assigned from the jointly owned forest, other terms and conditions, and any other matters important to the parties.

An estate is incorporated into the jointly owned forest through a land survey process, the fees for which are covered by state assets. Since incorporation into a jointly owned forest is not equivalent to a transfer of real estate, it is not liable to transfer tax nor does it incur taxable capital gains.

An example calculation of incorporation into the Forestia jointly owned forest

1. Basic information

(* the current Forestia jointly owned forest

(** the potentially formed new Forestia jointly owned forest (including Lauri Liittyjä)

2. Value of asset

3. Summary

The estimate is based on up-to-date forest data. The new member’s share of the jointly owned forest is calculated by comparing the investment value of the member’s forestry activity to the investment value of the new jointly owned forest. Any other values have been added to the investment value, at their value at the time of assessment.

The value of the growing stock is determined based on an estimate of future net income. A discount rate of 7 % is used for net income. Felling and forest management work will be assessed from up-to-date forestry management plans for the next 90 years, using the MELA software of the Finnish Forest Research Institute. The value of the growing stock at the end of the review period is included in the current value of net income.

The value of the ground area is determined using auxiliary tables for the real value method, published by Tapio, a provider of advisory and consulting services for forest management. The value of the ground area depends on the surface area and location of the forest asset and the nutrition of each stand. In accordance with general practice, an adjustment factor of -30 % is used for the overall value of the ground area.

Any other values (e.g. shoreline, earth materials, shares in Metsäliitto) will be assessed separately.