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Can trees be considered an asset

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Could trees be considered an asset? We need to cut down diseased trees, and replace with new trees. Could this be recognised as an asset? 

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paddle steamer
By DJKL
27th Mar 2020 08:43

For what purpose do you want to account for trees as an asset? (Accounts, Tax?)

What generally do the trees do re their function within/for the business?

Is it the replanted trees or those felled you wish to treat as assets?

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By kt-108
27th Mar 2020 08:55

Hi, for the accounts. The trees don't bring any economic benefit to the business. I was thinking more along the lines of an environmental perspective, preservation of bio-diversity? If the replanted trees were to considered an asset, then perhaps the felling of the old trees could be included in the cost of bringing the asset to it's current state?

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paddle steamer
By DJKL
27th Mar 2020 09:07

Think through the logic, if standing trees are an asset then cutting down the existing ones does what to the existing asset of standing trees? It can hardly be the case that new trees are an asset old trees are not, surely all would need treated the same way.(sounds a bit Animal Farm)

Luckily the trees are deemed to be included as part of the value of the land held within the accounts, presuming the business owns the land.

One might take a slightly different view if commercially farming them, e.g. Christmas trees, where one might value the "crop" but that is on the basis they are to be divided from the land within which they grow, your trees cannot (usefully-unless as timber) be so divided from the land.

My feeling in that absent a trading activity involving the trees the costs are expenses.

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paddle steamer
By DJKL
27th Mar 2020 09:10

I should have added environmental accounting may well blossom from its current lower key position, my daughter did some study of this as part of her degree in Sustainable Development, but there is not yet sufficient rigour/standards to create a cohesive accounting framework,

Once we all start earning and paying for everything with environmental credits, they become the world currency of choice, it may be a different matter.

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By kt-108
27th Mar 2020 13:00

No, it's a shame there isn't anything environmental accounting based to encourage sustainability. Thanks for your help!

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paddle steamer
By DJKL
27th Mar 2020 14:28

There is, but the field is still somewhat early stage.

See this for instance:

https://www.accaglobal.com/pk/en/student/exam-support-resources/professi...

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By Montrose
27th Mar 2020 12:52

" need ...to replace". Why "need to"?

If the land was purchased with existing, albeit diseased, trees were they integral to the value of the land? If so is this a case of maintaining value? The money spent on removing and replacing the trees is analogous to any other repairs, and does not add to the value of the land. Similar arguments would apply if the original trees had been subject to a TPO, necessitating replacement trees.

It becomes a bit more complex if when the land was purchased the price reflected the diseased state of trees which had[for whatever reason] to be replaced. If that had been the case the replanting costs could arguably be added to the value of the land.

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By Tax Dragon
27th Mar 2020 12:59

Whose trees are they?

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By Dib
27th Mar 2020 13:12

Are you thinking fixed plant?

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paddle steamer
By DJKL
27th Mar 2020 14:25

Not if they are Ents.

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By Tax Dragon
27th Mar 2020 14:49

I would not ask "whose are they?" of Ents.

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paddle steamer
By DJKL
27th Mar 2020 15:08

Yep, they might get a tad miffed .

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By Tax Dragon
27th Mar 2020 15:26

So, unless trees are (also) beings, my initial question above makes sense. Trees are capable of being owned. Indeed, they probably are owned. They are the owner's assets.

Next question.

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Replying to Tax Dragon:
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By Tax Dragon
27th Mar 2020 15:33

It is worth noting Montrose's point. Standing timber is, legally(*), part of the land on which it stands. (Felled trees are distinct assets.)

(*) IANAL. Double that warning: my knowledge of property law is notoriously non-existent.

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