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The stock method (BM) is, as the name implies, a valuation method based on the individual stock. The stock method has been developed in collaboration between Lantmäteriet and the Swedish Board of Agriculture, now the Swedish Board of Agriculture.
Design and management
Decisions on the design of the system were made during the development in a reference group where the Swedish Forest Agency, the Swedish Environmental Protection Agency, LRF, the Swedish Forest Academy, large-scale forestry (companies) and the Swedish National Board of Education were also represented.
The state's right according to the Copyright Act (1960: 729) to method and software is administered by Lantmäteriet . The further development of the method takes place in consultation with a user group composed of representatives of different user categories.
Return value and market value
The factors that affects the value of a forest property can be divided into two categories: Forest and market. Forestry is about the land's production capacity and the existing forest's possible return in money, market-based about the interaction between buyers and sellers. There is therefore also talk of two different values; return value and market value.
The return value is calculated using expected future income and costs for the property in question.
The market value becomes then depending on how the return value plus market factors such as the property's location, settlement opportunities, hunting values, etc. interact with the intended buyer's financial conditions.
Flexible system
The stock method has a personal computer support, BM-win. With it, you can make a long-term assessment, a projection, of the stock based on the conditions that the valuer finds in the field.
Thinning, final felling and forest management measures are simulated for two generations to come. The first generation of forest is the one that is already standing on the forest land today. This generation is projected until the final felling. The valuer can control the management of the stocks for the next 30 years. The exchange in timber and pulpwood is priced according to price lists specified by the valuer in the system. In a similar way, costs for felling and forest management are calculated. Rationing according to the Forest Management Act or your own alternative can also be selected in the program.
Calculation of present value
The last step is the present value calculation. The income and expenses that fall out in different time periods are charged with an interest factor (discount percentage). The discount percentage is stated by the valuer. The present values for the individual stocks are then summed to give the property's total present value.
Continuous development
We at Lantmäteriet develops BM-win all the time.
The method is adapted to changes in forestry, the timber market and new research findings so that the value-adding factors are described as well as possible. To guarantee a good development, there is a user group consisting of people from e.g. Svefa, LRF Konsult, the Swedish Forest Agency, forest owners' associations, Sveaskog and the Swedish Forest Society.