Nordic forest companies in these sources do not all apply IAS 41 in exactly the same way to the entire “forest” balance. The common pattern is that standing trees are treated as biological assets under IAS 41 and measured at fair value, while forest land is separated out and accounted for under IAS 16, often with fair value or revaluation logic for Nordic holdings. The key practical difference is that companies first determine a total forest value from market evidence, then allocate that total between trees and land using discounted cash flow logic. 13 189 160
The common IAS 41 logic is fair value for standing trees, not necessarily for land
Across Holmen, SCA, and Stora Enso, the recurring accounting logic is:
The economically relevant forest asset is split into two components:
biological assets: the standing trees
forest land: the underlying land
Biological assets are measured at fair value, typically using a discounted cash flow (DCF) or present-value model for expected harvest cash flows. 13 189 160
Forest land is not treated as an IAS 41 biological asset. Instead, it is accounted for separately under IAS 16, with company-specific policy choices about cost or revaluation. 189 160
That distinction matters because under IAS 41, fair value changes in the biological asset generally run through profit or loss, whereas land revaluation effects may go to OCI depending on the accounting policy for land. 13 160
Holmen uses a market-based value for land and a present-value model for trees
Holmen’s disclosures are especially clear. Forest land is recognised at fair value based on transaction prices in the counties where the group owns forest land, less the fair value of standing trees recognised as biological assets. Only productive forest land is assigned a value, and the fair value measurement is classified as Level 3. 13
For the biological asset, Holmen states that the value is determined by calculating the present value of expected future cash flows, less selling costs but before tax, from current standing trees. Post-harvest replanting costs are excluded, and trees currently growing are assumed to be harvested at an average age of 85 years. The model uses long-term harvest plans, wood price assumptions, cost assumptions, and a discount rate. 13 In 2023, Holmen explicitly said: "The value allocated to biological assets is determined by calculating the present value of expected future cash flows"13.
Holmen also derives its forest land benchmark from actual market transactions. It uses three years of aggregated transactions and adjusts for geography and timber stock differences across counties. At 31 December 2025, the transaction-based valuation of forest properties was 56,711 million Swedish kronor, equal to about 54 thousand Swedish kronor per hectare of productive forest land and 444 Swedish kronor per cubic metre of standing timber. 13
The accounting effects are split:
SCA starts from forest-property market transactions, then allocates between trees and land
SCA’s approach is conceptually close to Holmen’s, but the disclosure is framed more explicitly around the fact that forests are usually traded as combined properties. SCA says forest assets comprise biological assets and land, but because they are normally traded together, the relevant market is deemed to be trading in forest properties. The total forest value is therefore based on transactions conducted in the areas where SCA owns forest assets. 189
SCA calculates the total value of the forest asset by multiplying the price level from market transactions by SCA’s standing volume. The standing volume is based on historical forest inventory and simulated growth. For Swedish holdings, SCA uses transaction data from Ludvig & Co and Svefa, and bases the valuation on the last three years of forest transactions. 189
The split between components works as follows:
Biological assets are valued under IAS 41 using a DCF model. The model is based on sustainable harvesting plans and assumptions for growth, timber prices, harvesting and silviculture costs, selling expenses, and discounting. SCA also states that it capitalises replanting costs in this DCF. 189
Land is then measured as the residual: total forest asset value based on market transactions less the value of biological assets. SCA also performs a control valuation of land using DCF models to assess reasonableness. Land related to forest assets is measured at fair value under IAS 16, paragraph 31. 189
SCA also explains the fair value hierarchy well. Some inputs, such as transaction statistics, are market-validated, but the overall forest asset valuation is classified as Level 3 because SCA’s own standing-volume estimates and supplier adjustments include unobservable inputs. 189
The profit-and-loss effect follows the same pattern as Holmen:
Stora Enso uses a hybrid model: market approach for Nordic total forest value, then DCF allocation between trees and land
Stora Enso’s Nordic model is slightly more layered. In Sweden and Finland, it says forest assets are recognised at fair value using a market approach based on forest market transactions in the relevant areas. It uses three-year (36-month) weighted average market transaction prices and treats the measurement as Level 3 because management makes adjustments for asset characteristics, non-forest items, and outliers. 160
The key nuance is that the combined fair value of forest assets in the Nordics is first anchored to market transactions, and then the company allocates that combined value between biological assets and forest land using an income approach. Stora Enso says this allocation is based on separate present values of expected net cash flows for biological assets and forest land, using a discount rate implied by the market transaction valuation. 160 The audit report confirms that the total value of biological assets and forest land is reconciled to the market-transaction-based fair value of forest assets. 208
For the biological asset specifically, Stora Enso says the fair value is determined by discounted cash flows from continuous operations, taking into account the growth potential of one cycle. Annual harvest from forecast tree growth is multiplied by wood prices, then silviculture and harvesting costs are deducted. 160 Young standing timber below a certain age is carried at cost where fair value approximates cost. 160
The treatment of land is slightly more complex in Stora Enso’s note because different geographic portfolios use different methods:
For the Nordics, the accounting consequences are:
In 2025, Stora Enso disclosed forest assets of 6,641 million euros on the consolidated statement of financial position for subsidiary companies and joint operations, plus an indirect share of associated-company forest assets of 1,702 million euros. Total forest asset value including leased forest land was 8,478 million euros. 160
What these companies actually key off in practice
Despite different wording, the valuation mechanics are similar and rely on a small set of core assumptions:
Market transaction evidence for total forest-property value in the relevant region. Holmen, SCA, and Stora Enso all use multi-year transaction data to smooth thin local markets. 13 189 160
Standing timber volume from forest inventory plus simulated growth. 13 189
Long-term harvest and growth assumptions, rather than spot harvesting patterns. 13 160
Wood price and cost assumptions, usually normalised or trend-based rather than current peak prices. Holmen, for example, said its wood price assumption for 2025 valuation was 25% below the average realised own-forest wood price in 2025. 13
Discount rate / yield requirement, which mainly affects how total value is split between land and biological assets when the total market value is already anchored externally. SCA says the yield requirement does not affect the total forest-asset value, only the allocation between biological assets and land. 189
The simplest answer to “how do they value forests under IAS 41?”
The short answer is that these Nordic forest companies do not generally value the whole forest under IAS 41 as one single asset. Instead, they separate the forest into standing trees and land:
Standing trees are the IAS 41 biological assets, measured at fair value, usually via discounted future net cash flows from harvesting. 13 189 160
Forest land is accounted for separately under IAS 16, often using a market-anchored fair value or revaluation method for Nordic holdings. 189 160
In practice, the companies often start from observed forest-property transaction values for the combined forest estate, then use DCF models to allocate that total between the biological asset and the land component. 13 189 160
So the defining Nordic feature is a market-anchored whole-forest valuation combined with IAS 41 fair value accounting for the trees themselves, rather than a pure stand-alone timber DCF for the entire forest estate.
Sources
Holmen B · Notes · 2025 · p. 13
SCA · D3 Forest assets · 2025 · p. 189
Stora Enso Oyj · Critical accounting estimates and judgement · 2025 · p. 160
Holmen B · Year-end report 2023 13/18 · p. 13
Stora Enso Oyj · Key audit matter in the audit of the group How our audit addressed the key audit matter · 2025 · p. 208