This chapter covers the valuation of biological resources, with specific focus on timber resources and forest land, as well as aquatic resources. Both types of resources are treated systematically. First, the scope, definition, and classification of the assets to be included in the national accounts is provided. Then four compilation stages are presented and explained. Finally, resource specific compilation issues are covered as well as modifications to the standard approach.
Measuring Natural Resources in the National Accounts
A Compilation Guide
Abstract
387. The term “biological resources” in the 2025 System of National Accounts refers to naturally occurring assets in the form of biota (trees, vegetation, animals, birds, fish, etc.) (§11.206). The 2025 SNA makes a distinction between cultivated biological resources yielding repeat products (AN331), biological resources yielding once only products (AN332), which can be cultivated or non-cultivated and work-in-progress on cultivated biological resources (AN333) (either on repeat or once-only biological resources).1
388. The 2025 SNA contains several changes regarding the measurement and recording of biological resources compared to the 2008 SNA. As cultivated biological resources yielding repeat products (fixed assets) and work-in-progress on cultivated biological resources in agriculture are considered relatively straightforward, the scope of the revised recommendations is focused on the measurement of timber resources and forest land (as part of respectively AN333 and AN31) and non-cultivated fish resources (as part of AN3322). The accounting treatment of timber resources and forest land is complex as they constitute a composite asset. The resulting estimates for forest land are to be recorded as land in the 2025 SNA and not as biological resources; but as the calculation is bound up with that of timber resources, we include it in this chapter.
389. A key distinction is between non-cultivated and cultivated biological resources. In the 2025 SNA, this will be defined slightly differently compared to the 2008 SNA as: “Resources where the control, responsibility and management does not go beyond the establishment of quota regimes (e.g. migrating wild animals and fish in open waters) versus resources where one can observe a continuum from intensive to extensive forms of control, responsibility and management (e.g. the growth of trees for timber production).” As a result, fish in open water such as the sea, rivers or lakes (but excluding aquaculture which are cultivated assets) will be treated as non-cultivated assets, while timber resources will be treated categorically as cultivated.
390. There are already quite a few countries that regularly compile asset accounts for timber and forest land in monetary terms whose compilation experiences can be drawn upon.2 The FAO’s Forest Resource Assessment (FRA) has been assessing timber resources since 1990 (five-yearly), and provides standardised concepts, definitions and classifications for measurement in physical units. The same definitions underpin the SEEA CF, which contains a discussion of forest accounts (in physical and monetary units), where it should be noted that the SEEA has a broader physical asset boundary than the SNA. The upcoming expansion of the EU environmental economic accounts directive to include forest accounts will make compilation of forest accounts a legal requirement for all EU member states. To support compilation, a revised European Forest Accounts (EFA) handbook (Eurostat, 2024[1]) has been released3 which contains detailed guidelines for measuring and valuing timber resources and forest land consistent with the 2008 SNA/2010 ESA. The World Bank (2017[2]) has also published a guide entitled “Forest Accounting Sourcebook. Policy applications and basic compilation”. The recommendations presented in this chapter build upon these guidelines, and regarding valuation are aligned with the EFA (apart from any changes arising between the 2008 SNA and 2025 SNA).
391. The situation regarding aquatic resources is quite different, with only a handful of countries currently compiling monetary asset accounts. The SEEA-Fisheries (UNSD, 2006[3]) contains useful conceptual guidance, but its status is unclear4 and some of the guidance appears outdated. The SEEA for Agriculture, Forestry and Fisheries (SEEA AFF) (FAO and UNSD, 2020[4]) contains useful guidance on physical and monetary flow accounts but refers to the SEEA CF for the monetary asset accounts, and the SEEA CF only provides general guidance.
392. Non-cultivated aquatic resources, especially fish, pose specific measurement challenges compared with other biological resources such as timber or livestock. Fish stocks are usually not directly observable; some of the assets move in and out of national boundaries (which are described as Exclusive Economic Zones - EEZs) and require a global approach; and depletion of fish stocks can be caused by non-residents on the national territory (or by residents abroad). Also, in many countries subsistence and artisanal fishing are important activities, which overlap with the measurement of the informal economy. The recommendations presented in this chapter build on existing materials to the extent possible, but in several instances go beyond existing treatment.
393. As in Chapter 4, the three-tier approach (basic, standard, advanced) will be used in this chapter to provide different options for compilers depending on their data availability and resources. The standard approach (Tier 2) will be described as the default. The chapter will also outline a Tier 1 (basic) approach that would typically be followed in case of limited data availability and/or resources and Tier 3 (advanced) methods requiring high data availability and resources.
394. The outline of the chapter will be as follows. Section 5.2 will focus on timber resources and forest land, and Section 5.3 on non-cultivated aquatic resources, both following the same structure in terms of subsections. First, the scope and definition of the assets to be included in the national accounts is provided, as well as relevant classifications. Second, four compilation stages are presented and explained: identifying the types of assets to be included and valuation methods; collecting the physical and price data; building the monetary asset accounts; and integration of the results into the sequence of economic accounts. Third, we discuss specific compilation issues; and finally, modifications to the standard approach. Section 0 (briefly) discusses also the valuation of other classes of biological resources such as the treatment of biological resources yielding repeat products (AN331), biological resources yielding once-only products other than fish resources such as wild animals (AN332), and work-in-progress on cultivated biological resources other than timber such as animals for slaughter, agricultural crops and aquaculture (AN333). A text box with a summary of key recommendations concludes the chapter.
395. Two accompanying Excel workbooks have been developed: Workbook: timber resources and forest land, and Workbook: fish resources. These facilitate and illustrate compilation according to the 2025 SNA and are referred to in Sections 5.2 and 5.3.
5.2.1. What to include in the national accounts
396. As noted above, the 2025 SNA (§11.208) defines cultivated biological resources as a “continuum from intensive to extensive forms of control, responsibility and management”. The results of various global consultations for the SNA update suggest that the continuum wording has been interpreted as implying that any area of forest land (including inaccessible/remote areas) would need to be treated as cultivated in the 2025 SNA. This is not the intention. It is important to clarify that in the 2025 SNA, timber in remote or non-logged areas (such as the Amazon or Siberia) will continue to be outside the asset boundary, as in the 2008 SNA, unless commercial exploitation occurs. The overarching criteria remains whether the assets are economic i.e. they are used for deriving economic benefits.
397. It is clear that all instances of timber harvesting activity whether undertaken for own use or for commercial purposes are recorded as part of production and consumption as this clearly falls within the SNA production boundary. The 2025 SNA (§13.24) further clarifies the conditions under which an asset would be recognised: “For other (non-produced) natural resources, the first substantial market appearance, generally involving commercial exploitation, is the reference point for recording in this account. For forests, gathering firewood is not commercial exploitation, but large-scale harvesting of a forest for timber is and brings the forest into the asset boundary.” Thus, the key criteria for recognition as economic asset is whether the extraction activity is of commercial scale. Commercial activities would consist of logging activities that are not primarily for own use and this would be a sufficient condition to bring the asset within the asset boundary. By extension, situations of common pool resources, firewood collection or indigenous use of resources, would not draw these assets into the asset boundary, unless their use can be considered commercial (as evidenced through payments for the harvested resources).
398. The 2025 SNA (§11.220; §11.238; §14.62) makes a key distinction between what it calls the underlying asset (e.g. forest land) and the inventories (work-in-progress of standing timber on the land), together forming a combined asset. This idea is aligned with the European Forest Accounts (EFA) handbook (Eurostat, 2024[1]) which refers to the composite asset as the forest estate, and further distinguishes between wooded land and timber stocks. Likewise, the SEEA CF speaks about biological resources as composite assets.5
399. In this chapter, we will use the terminology of timber resources (the work-in-progress) and forest land (the underlying asset), as two distinct parts of a composite asset. For the purposes of national accounts compilation, both timber resources and forest land need to be valued. The timber resources capture the value of standing timber as work-in-progress (inventories), whereas the forest land captures the potential of the land to continue providing timber in future, its regenerative potential. As noted above, timber resources will be classified under biological resources (work-in-progress) while forest land will be classified under land resources.
400. It is particularly important to note that as the 2025 SNA treats all timber resources as cultivated, it is necessary to follow an accrual reporting of output. This means that the growth of all timber resources which are included in the SNA asset boundary (whether formerly treated as cultivated or non-cultivated stocks) is to be recorded as output instead of the value of the timber at the moment of harvest (for formerly non-cultivated resources). This places clear demands on compilers in terms of the physical data underpinning the monetary valuation, as will be discussed in Section 5.2.2 Stage 2.
401. In case of composite assets (e.g. timber resources and forest land), it is also important to distinguish between two possible cases of contracts between the legal owner and the extractor. The first possibility consists of a pure sale of inventories (i.e. work-in-progress): in this case, payables from the extractor are the counterpart of the sale of inventories; no leasing of the underlying asset takes place and hence no rent payment. The second possibility is leasing of natural resources: in this case payables from the extractors are rent and hence no sale of inventories is recorded. These cases are further discussed in Section 6.5 on the split-asset approach.
5.2.2. Compilation stages
402. As discussed above, timber resources and forest land are two distinct parts of a composite asset. Regarding the measurement of both assets, four compilation stages are distinguished: identifying the types of assets to be included and valuation methods; collecting the physical data; building the monetary asset accounts; and integration of the results into the sequence of economic accounts.
Stage 1 (timber resources and forest land): Identifying types of assets and valuation methods
Identifying types of assets
403. In the first stage, the types of timber resources for which accounts are to be compiled need to be identified. The 2025 SNA provides a generic definition of timber resources as “a type of biological resource that are valued in terms of the expected harvesting of timber ... most commonly present in areas of forest land but the harvesting of timber, and hence the stock of timber resources, can occur in other areas of land, in particular agricultural land, for example through agro-forestry production systems.” (§27.33) For a more specific definition, they are defined here consistent with the SEEA CF:6
Within the relevant areas, timber resources are defined by the volume of trees, living or dead, and include all trees regardless of diameter, tops of stems, large branches and dead trees lying on the ground that can still be used for timber or fuel. The volume should be measured as the stem volume over bark at a minimum breast height from the ground level or stump height up to the top. Excluded are smaller branches, twigs, foliage, flowers, seeds and roots. (SEEA CF, §5.350).
404. The FRA provides in some cases more specific guidance on definitions. For instance, the growing stock of timber resources is defined in the 2020 FRA as: “Volume over bark of all living trees with a minimum diameter of 10 cm at breast height (or above buttress if these are higher). Includes the stem from ground level up to a top diameter of 0 cm, excluding branches.” (FAO and UNSD, 2020[4])
405. In order to estimate the volume of timber resources, it is recommended to first compile an account for forest land (expressed in hectares). This is suggested by the SEEA CF and in line with the proposed amendment to the EU directive on EEA concerning forest accounts, which requires information about the area of wooded land, broken down by:
forest available for wood supply
forest not available for wood supply
other wooded land
other land available for wood supply (e.g. agricultural land)
This is discussed further in Stage 2.
406. Here forests available for wood supply are understood as “Forests where any environmental, social or economic restrictions do not have a significant impact on the current or potential supply of wood. These restrictions can be established by legal rules, managerial/owner’s decisions or because of other reasons.” (Eurostat, 2024[1]) Other wooded land is defined as “land not classified as forest, spanning more than 0.5 hectares; with trees higher than five metres and a canopy cover of 5-10% or trees able to reach these thresholds in situ; or with a combined cover of shrubs, bushes and trees greater than 10%. It does not include land that is predominantly under agricultural land use or trees in urban settings, such as city parks, alleys and gardens.” (Eurostat, 2024[1])
407. The SNA is exhaustive implying that all assets with economic value within the asset boundary should be estimated. However, due to the resource intensive nature of the valuation of biological assets, it is proposed to apply a materiality threshold in the form of a long-term average contribution of Forestry and logging to GDP of at least 0.1%.7 Furthermore, it is proposed that in the standard approach, timber resources on other wooded land may be omitted. Regarding forests not available for wood supply, it is possible that illegal logging takes place: when these illegal activities are structural and at commercial scale they would give rise to recognition of assets and would need to be measured, as further discussed in Section 5.2.3. The situation of other land available for wood supply is complex: the standing timber would be in scope of work-in-progress, but when estimating the value of forest land, care should be taken to avoid double counting with agricultural land. As will be further discussed in Stage 2 (timber resources): Collecting physical and price data, for national accounts purposes we would be including only those timber resources expected to be used in (future) economic activities, providing a further restriction on the scope of resources to be included both in terms of measurement of output and as economic assets.
Source: Author.
408. The accrual recording of output for cultivated assets implies that the growth of timber stocks is recorded as additions to work-in-progress.8 Formally, when the timber is mature, the cumulated value of work-in-progress is converted to inventories of finished goods (of mature standing timber). When the timber is logged it would become a different finished good (roundwood), which is then run down as it is used by the producer or sold or lost. In practice, the conversion to inventories will usually not be made, and a withdrawal from work-in-progress recorded when timber is felled and/or removed from the forest. Accrual recording allows for a continuous recording of output as inventories of standing timber grow, instead of a one-off recording of output concurrent with the actual harvest (used previously in 2008 SNA for non-cultivated timber resources). For a single asset (e.g. a specific logging site which is say harvested every five years) the implication will be that output is recorded earlier and more continuously, however when averaging over a large number of sites these effects may be expected to disappear (unless in situations of significant dynamics within the forestry sector).
Valuation methods
409. As part of Stage 1, in addition to identifying the assets it is important to consider what method will be used to produce monetary values. In the case of timber resources and forest land, the approach is more complex than for the other biological resources; therefore, we have included a specific discussion here. We will first discuss valuation methods for timber, then methods for valuing forest land.
410. For timber resources (work-in-progress), this compilation guide recommends, consistent with the valuation hierarchy discussed in Section 3.2, using observed market transactions. In the case of timber resources however, various methods fall into this category.
Primary data sources available
The French national geographical institute (IGN) is the main primary data source for:
The areas of forests and other wooded land in hectares.
The volumes of standing timber in cubic meters, thanks to the annual forest inventory. The forest inventory is conducted as a sample survey, combining aerial photography analysis and field observation. Definitive results are obtained as five years moving averages of annual sample results.
Statistics on prices of standing timber and wood in the rough come from the National forests office (ONF), from private associations of forest owners and from the ministry in charge of forests.
Forests accounts
All these primary sources of information are put together in the Forest accounts, which are compiled according to the SEEA recommendation. More precisely, France complies with the European regulation on European forest accounts (EFA), which describes the data tables and compilation methods required. The transmission of the EFAs to Eurostat used to be on a voluntary basis but will become compulsory for all Member States starting in 2025.
The Forest accounts provide a synthesis of the state of French forests and forestry activity. Compared to the raw data source mentioned above, they introduce significant advantages:
Definitions and concepts from the primary sources are harmonised to conform to the Eurostat standard (for example, include the volume of large branches into the volume of standing timber).
Physical and economic tables are built based on the same perimeters.
Potential inconsistencies in primary data sources are analysed and reconciled as much as possible.
Important statistics are produced during the compilation of the accounts. In particular, the average price of harvest cannot be directly observed in the primary sources. It has to be reconstructed, considering the structure of harvest: different prices apply to round wood for construction, for other use, firewood directly gathered by households etc.
For all these reasons, the Forest accounts are taken as a starting point when building the SNA accounts related to forestry activities or forest value.
Accounting under 2008 SNA
To account for forest output, two sub-industries are distinguished: Silviculture and other forestry activities (02.1) and Logging (02.2).
The output of Silviculture and other forestry activities (02.1) is standing timber. It is valued as the “Net annual increment of timber”, that is the average annual volume growth of live trees less the average annual mortality. This key figure is extracted directly from the forest accounts.
The output of Logging (02.2) is wood in the rough. Conceptually, it is simply the sales of wood in the rough, excluding all taxes (basic price). A practical difficulty is that the sales can be made by purely logging companies (NACE 02.2) but also by combined logging / sawmilling companies (NACE 16.1). The total output of raw wood must cover these two sources.
The French SNA balance sheet for forests is built in three steps:
Total forest land including standing timber is valued directly based on market transactions in forest estates.
Standing timber is then valued separately (as a national aggregate), based on the forest accounts.
The value of the “underlying asset” (in French “fonds forestier”) is finally deduced as a residual, by taking the difference between the total value of the land and the value of the standing timber.
This approach is possible because the French forest is largely privately held (75%), with many observed transactions (around 20.000 yearly, representing between 0.5% and 1.0% of the total surface). It is however possible that this valuation is biased, because some plots are rarely or never traded.
What is planned for the next benchmark revision and the adoption of 2025 SNA
For the next national accounts benchmark revision, the first improvement will be to aim for a full consistency with the new forest accounts which will be transmitted to Eurostat. Currently, some series are not fully consistent between the two sets of accounts.
A second possible improvement will be to improve the modelling of the stock values in the balance sheet:
The standing timber could be valued using a “consumption value method” rather than the current “stumpage value method”. This would require the use of more detailed price information, specific to species and age groups.
The stock value of forest estates could be estimated using more detailed plot characteristics, combined in a stratified or hedonic pricing model.
More importantly, in order to estimate depletion / net regeneration in the new SNA accounts, the French national accounts will now measure the resource rent of silviculture (NACE 02.1) and project it into the future to obtain the net present value (NPV) of timber resource rent. This new valuation approach will need to be articulated with the current (market based) approach to forest land valuation.
411. Regarding the valuation of the timber resources, the EFA explains the importance of distinguishing between mature and immature trees (Eurostat, 2024, p. 77[1]): “For trees that are ready to harvest, the general assumption is that they will be harvested in the current accounting period and hence the value will be equal to what the unharvested timber can be sold for in the current period.” The EFA continues to explain that the “relevant price for undertaking this valuation is the current stumpage price” and it refers to the original definition of the stumpage price contained in the European Framework for Integrated Environmental and Economic Accounting for Forests (IEEAF) as “the value of, or price paid for, timber as it stands uncut in the woods.” (Eurostat, 2002, p. 34[5])
412. Discussions in the EGNC have indicated that countries use the term “stumpage” differently. For example, in Canada it is common to speak about stumpage fees, which can be understood as “the fee paid by an individual or company for the timber they harvest from public forests or privately owned forest land.”9 There appear to be therefore different interpretations of what stumpage means: the price that somebody would be willing to pay now to cut trees now, or giving somebody the right to harvest now or at a later time of their liking after the trees have matured. For sake of clarity, in the guidelines, the stumpage price is understood as the former, the latter is referred to as a stumpage fee. This is important, as stumpage fees may be used as one of the elements to split the asset between producer and government (as discussed in Chapter 3).
413. In some countries directly observable stumpage prices exist due to transactions in standing timber. In the majority of countries, for instance in situations of natural forest cover, stumpage prices need to be derived indirectly based on road-side pick-up prices for logs (i.e. after harvesting) which are commonly available. To arrive at the stumpage price, the following costs need to be deducted:
Harvesting costs: these costs also include cutting off of branches etc.
Transport costs: the costs of hauling the felled logs to the road and stacking them.
User cost of fixed capital: this includes both depreciation and a return for the use of machinery involved in logging and transportation such as chainsaws, tractors etc. 10
414. The indirect method to arrive at a stumpage price relies on many assumptions. The price will depend on what the timber is to be used for (e.g. construction wood or firewood), and there may be a need to take this into account by weighting the volume based on expected uses.
415. For trees that are not yet mature (i.e. work-in-progress), valuation is more complicated. The EFA (Eurostat, 2024[1]) specifies three elements that need to be considered:
First, the volume of the stock will be less than the volume at harvest and the value must be calculated based on the current volume. Second, the revenue to be earned from harvesting will not occur in the current accounting period but at some point in the future. Thus even if the current stumpage price remains the same, since the revenue will not be received until later, it is necessary to discount the expected price to the current period. Third, since the trees are still growing there will be some costs incurred to bring the trees to maturity, for example, costs of thinning and other management costs. These costs need to be deducted in estimating the relevant price recognising that the costs will vary depending on the age of the tree and the time to maturity, and indeed for trees that are closer to harvest these costs may be relatively small. (§4.70)
416. The EFA distinguishes between four valuation methods for timber resources that differ in how they address these three issues (EFA section 4.3; see also IEEAF Annex III):
The stumpage value method values timber resources by multiplying the total physical stocks (i.e. of both mature and immature standing timber) with the stumpage price of mature timber.11
The consumption value method values timber resources by distinguishing between stocks of different age classes (and hence different sizes / diameters). The value of timber resources is obtained by multiplying the physical stocks of those age classes with their respective stumpage prices.
The net income method distinguishes between stocks of different age classes and values them with the stumpage price of mature timber, but discounted taking into account how long it will take for each age class to reach maturity, and if possible the expected costs to bring the trees to maturity.
The age constant method also distinguishes between stocks of different age classes and values each class by multiplying the expected felling value with an age factor. The age factor can take several aspects into accounts such as costs, as well as discounting. As the method is less clearly developed than the others (and can also be seen as an example of the net income method), it is not further considered.
Notes: the example is based on a single timber stand with trees that have been planted at year 0 and grow linearly over time, assumed to reach maturity after 10 years.
Source: Author’s illustration.
417. As illustrated by Figure 5-2, in case of the assumed hypothetical situation of a single timber stand, these methods will result in a different value of timber resources over time, with the stumpage value giving the highest value and the consumption value method giving the lowest value. There are two ways to evaluate these methods: in terms of the sequence of additions to work-in-progress or in terms of the value of standing timber (stocks). For the national accounts, it is particularly important to obtain a correct sequence of additions to work-in-progress and withdrawals from inventories because these (i.e. the growth expected to be harvested, less natural losses) are what will be included in GDP.
418. The consumption value method is the only method that recognizes that timber stocks get more valuable the larger their size and arguably provides the correct sequence of work-in-progress and is therefore the conceptually preferred method. The net income method can be understood as an improved version of the stumpage value method that is less demanding in terms of data availability than the consumption value method.
419. However, in practical applications, we would always have a large number of areas of forest land. Under these circumstances, the differences in annual flows would mostly disappear: all three methods – as long as we assume equal distribution of ages of the trees – would give the same (constant) time sequence for work-in-progress.12 The inventory values (stocks) however would still be different.
420. A second perspective on evaluating these different methods consists in their data requirements. The stumpage value method can be considered a rather simple method with lowest demand on data availability. It is the method that is most widely applied by countries. The consumption value method depends on the availability of stumpage prices for different age classes which may not be available for many countries, although section 5.2.4 also discusses an alternative way of implementing the consumption value method using the so-called capitalisation of costs method that lessens the data requirements. The net income method and age constant method also depend on granularity of data on timber stocks. In this compilation guide, the stumpage value method is recommended as default approach, with the other methods considered as advanced methods. Its application is discussed in Stage 2.
421. We will now turn to the discussion of valuation methods for forest land (the underlying asset), for which different valuation methods exist.
422. For calculating the value of forest land (the underlying asset), the preferred approach would be to start from observed market transactions in forest estates (i.e. composite assets of timber resources and forest land) if such data is available. If a sufficient amount of transactions are available including information about the characteristics of each piece of land, a hedonic pricing analysis can be conducted to differentiate between the value of the timber resources and the land itself. Hedonic pricing analysis is considered an advanced method and is discussed in Section 5.2.4.
423. If a sufficient and representative number of transactions are observed, the value of the composite asset in the standard approach can be obtained by multiplying the total surface area times the average price (per hectare) of the transactions observed during the accounting period (see example France in Box 5-1). The value of the forest land is then calculated as a residual by deducting estimates of the value of work-in-progress, as illustrated in the country example from France.
424. If insufficient market transactions are available (for instance when land is mostly government owned), the recommended method to calculate the composite asset is to apply the NPV of future resource rents, as in the cases discussed in Chapter in Chapter 4. This produces an asset value representing the whole of timber production, including work-in-progress and the potential to generate future production. As in the case of market transactions, the asset value of the forest land can be estimated as a residual by subtracting the estimates of work-in-progress, as also described in the 2025 SNA: “Exchange prices for forest land are usually not available, and need to be approximated using the present value of future economic benefits, after deduction of the value of the work-in-progress” (§11.220).13 This method is described in Stage 3 and illustrated in the Workbook: timber resources and forest land.
425. It should be mentioned here that the NPV method of future resource rents primarily values the provisioning service of timber generated off the land. This should be considered a lower bound estimate of the value of forest land, as in some instances the land is also used for other purposes (such as hunting or collecting of non-timber forest resources such as berries and mushrooms) which may yield additional economic benefits. A related issue is that transactions in forest land commonly show that parcels closer to urban areas fetch a higher market price, which may be due to their proximity to people or due to some option value for possible conversion to other land uses being priced in (e.g. land speculation). This additional value would in part reflect what SEEA CF describes as the “provision of space” (United Nations et al., 2014, p. 7 (§1.49)[6]). Therefore, we can think of the composite asset as consisting of three separate assets: a) work-in-progress of timber production; b) the underlying asset for timber production; and c) additional value such as the provision of space. The third element is recommended to be measured directly through application of the hedonic pricing method or indirectly as a residual of the market transactions of land and the NPV of resource rents. In the 2025 SNA, both the value of the underlying asset and any additional value due to for instance the provision of space are classified under AN31 Land Resources. For the valuation of depletion, only the value of the underlying asset should be used, as it is this value that is directly related to future timber production.14
Stage 2 (timber resources): Collecting physical and price data
426. The second stage of the compilation process is to collect the physical and price data that will be needed to produce the physical asset accounts and monetary asset accounts for timber and to project future resource rents. This stage is illustrated in the Workbook: timber resources and forest land in the work-in-progress worksheets, for which two examples are provided: 2022 and 2023. There are three steps:
1. Collect data on areas of forest land.
2. Collect physical data on timber.
3. Collect price data.
427. Step 1 is to collect data on areas of forest land. The workbook shows an example in rows 5-12 of the work-in-progress worksheets, and this is also shown in Table 5‑1. For the purposes of the SNA, the focus of measurement usually lies on timber resources within forests available for wood supply (which includes plantations), which is the assumption used in the example, however as discussed under Stage 1 there are situations where the measurement scope needs to be extended for instance in case of illegal logging or extensive agro-forestry practices. Between 2022 and 2023, Table 5‑1 shows that the forest available for wood supply (FAWS) increases by 4 hectares. As recommended by EFA (Eurostat, 2024[1]), the account for forest land should be disaggregated by (main) species, as different species may have different timber density, growth and mortality rates, etc.15 The increase in FAWS in the example is associated with Species A.
Source: Workbook: timber resources and forest land, work-in-progress worksheets, Step 1.
428. Table 5‑2, available in rows 14-19 of the work-in-progress worksheets (Step 2), contains the other physical input variables used for the two species. Density (m3/ha) expresses the average density of each species in their respective forest land areas. The growth rate and mortality rate of the trees is also required, as this will be needed to calculate the net increment of timber, which is defined as growth (or gross increment) less natural losses. This type of information is typically available from a forest inventory or scientific reports (see Box 5-2).
429. The EFA (Eurostat, 2024[1]) also recommends that density should be expressed over bark (i.e. including bark). Reference is made to EFA Chapters 3 and 4 which contain more detailed information about the compilation of physical asset accounts, including conversion between units, disaggregation by species, as well as a detailed discussion of possible data sources and how they can be integrated.
Source: Workbook: timber resources and forest land, work-in-progress worksheets.
430. For each species a percentage expected to be harvested also needs to be estimated. This is a little more complex, as explained below. Forest available for wood supply, density and the proportion expected to be harvested are multiplied in row 37 of the work-in-progress worksheet to produce the initial opening balance of the physical asset account at the start of Stage 3 (2022) in our example.
431. The challenge for national accounts compilation is that the net annual increment in the timber resources available covers both actual and potential wood supply. However, for the accrual recording for output we need to estimate the net increment that is expected to be harvested in the future, so we need to exclude the growth which will not be harvested. This is an important distinction between the SNA and the EFA (and the SEEA CF) which has a broader asset boundary. Estimating this proportion may seem difficult but, as argued in the Guidance Note WS.8, it is not much different from the projections that already need to be made according to the 2008 SNA when applying a NPV method for estimating the monetary value of non-cultivated biological resources based on current and future harvests: in both cases we need to estimate how much timber will be eventually harvested, the main difference is one of timing.
432. To estimate the percentage of growth that will be harvested in the future, it is recommended to use land-use planning information and/or information about licenses provided to forestry companies. For instance, this type of information may indicate the level of harvesting that is allowed. In the absence of such detailed (spatially explicit) information, a coefficient may be applied based on an analysis of historical records of net annual increment and removals.
433. For example, the coefficient could be estimated as: removals: 90 / net annual increment: 100 = 0.90. As the amount of removals is likely to vary year by year, for instance as a result of damages, it is recommended to average removals for at least three years when estimating the coefficient.
434. Another illustration is the OECD indicator “intensity of use of forest resources” (which is part of a dataset called “Depletion and growth of forest resources in terms of volume”)16 which is calculated as the ratio of fellings to annual productive capacity (gross increment) covering about 35 (OECD) countries. The indicator averages over a long time period between 0.5 and 0.9 for countries.
Several data sources commonly exist in countries for the compilation of physical asset accounts for timber resources. These include:
Forest Inventories. Forest inventories usually contain detailed information such as area of forest land, timber stocks, annual increment, stocking densities, management types (commercial and protective forests), ownership type (private small scale, private large scale, public), age classes, growing classes based on average diameter at breast height, tree species, dead trees and damaged trees, removals including harvest and natural losses. Data is for national level and/or subnational areas. Frequency of data collection is usually low, only once in every 5-10 years.
Felling statistics: Provide annual data on the volume of wood in the rough harvested on forest land.17
Forest enterprise surveys: Cover usually agricultural and forestry holdings with a certain minimum area.
Agricultural census data: Provides information on “other land with tree cover”, most importantly short rotation coppices and Christmas tree plantations.
Geospatial information: Earth Observation data can be used to provide information about tree covered areas and changes over time.
In principle, both the timber felling reports and the inventory provide aggregated data on stock removals in productive forests with an annual periodicity. However, it should be noted that there are several methodological differences between these data sources and as a result there may be considerable differences in outcomes. These differences are due to annual observation in surveys versus interpolation when using less frequent inventories; existence of minimum thresholds in areas when surveying; use of different units (e.g. over/under bark) requiring conversion; volatility in annual data due to natural variability or damages.
Different data sources can be compared to enhance consistency.
A lot of the variables required for the physical asset account are collected by the FAO from countries every five years, see https://fra-data.fao.org/.https://fra-data.fao.org/
435. The final step in Stage 2 (Step 3) is to collect price data and calculate stumpage prices. This is illustrated in rows 21-30 of the work-in-progress worksheets and in Table 5‑3. Information is required for roadside pickup prices and cost of harvesting and transport for the two species, as well as user costs of fixed capital involved in logging. Stumpage prices are then calculated as roadside pickup prices less total costs.
Source: Workbook: timber resources and forest land, work-in-progress worksheets.
Stage 3 (timber resources): Building the monetary asset accounts for work-in-progress
436. The third stage of the compilation process for timber resources (work-in-progress) is to compile the physical and monetary asset accounts for timber. This stage is illustrated in the Workbook: timber resources and forest land in the work-in-progress worksheets, for which two examples are provided: 2022 and 2023. There are two steps:
1. Compile the physical asset account for timber
2. Compile the monetary asset account for timber
437. Using the physical data collected in Stage 2, it is straightforward to compile a physical asset account for timber resources as shown in Table 5‑4 and illustrated in rows 34-49 of the work-in-progress worksheets. This is done for each species. The opening stocks of 2022 are calculated as described above: FAWS × density × proportion expected to be harvested. Gross increment and mortality can be calculated based on growth and mortality rates, and these rates can be adjusted from year to year. Also the percentage expected to be harvested can be adjusted from year to year.
Source: Workbook: timber resources and forest land, Work-in-progress (2022) worksheet.
438. However, some additional items are required at this stage. The most important of these is the volume of removals, which will feed into the calculation of depletion of forest land in Stage 3 (forest land): Building the monetary asset accounts. Within forestry statistics, an important distinction is between removals18 (which may include also trees that were felled in earlier periods or were lying dead on the ground) and fellings (i.e. trees that are cut down in the accounting period). It is common practice for felled trees, after removal of branches, to be temporarily stored within the forest (e.g. close to forest roads). It is important to realise that stocks of timber resources include not only living trees (i.e. the growing stock or work-in-progress), but also dead trees (called deadwood) and felled timber (which may be stacked and stored within forest areas).19 While the difference between removals and fellings is important, especially for compiling forestry statistics and accounts, for national accounts compilation (in the standard approach described here) it is sufficient to focus on the measurement of removals.
439. Other important items within the physical asset account are the estimates for growth and natural losses, as these will provide the underlying information required for the accrual recording of output, which feeds into GDP. The EFA talks of “net annual increment of timber”, defined as “the average annual volume growth of live trees less the average annual mortality” (EC, 2022[7]).
440. Average losses should be distinguished from “catastrophic losses” (as described in the SEEA) which captures other reductions in inventories due to exceptional and significant losses from natural causes such as windthrow, forest fires, pests or insect infestations.
441. Finally, the physical asset account includes any reappraisals or reclassifications. Reappraisals can arise due to for instance a change in the area of forest land available for wood supply or in the percentage expected to be harvested.
442. For monetary valuation of work-in-progress the 2025 SNA specifies the following. “Additions to, and withdrawals from, work-in-progress are treated in the accounts in the same way as entries to, and withdrawals from, inventories of finished goods. They must be recorded at the times they take place and at the basic prices prevailing at those times.” (§7.123) “For inventories of work-in-progress, the value for the closing balance sheet should be consistent with the value of the opening balance sheet, plus any work put in place during the current period, less any work completed and reclassified as finished goods. In addition, an allowance for any necessary revaluation for changes in prices in the period must be included.” (§14.45).
443. Therefore, once the physical asset account for timber is complete, it is straightforward to compile the monetary asset account for timber (see rows 52-67 of the work-in-progress worksheets), see also the country example from Austria. This is done for all but one line by multiplying the physical units by the stumpage price for each species of tree. The exception is revaluations: if there is a change in the price of Species A or B during the accounting period, this should be included (multiplying the average physical stock by the price change).20 In the example for 2023 shown in the workbook and in Table 5‑5, the opening stock of timber resources is valued at 2 917 (this is the closing stock from 2022). The closing stock is calculated as the opening balance plus additions less reductions plus revaluations and is 2 971 in this example.
444. In the case of the monetary asset account, the net increment (now expressed in monetary terms – row 67 of the work-in-progress worksheets and the last line in Table 5‑5) is recorded as output of timber. This figure not only feeds into GDP but is also the starting point for the calculation of actual and future resource rents in the accounts for the underlying asset: forest land.
Source: Workbook: timber resources and forest land, Work-in-progress (2023) worksheet.
This example describes how physical and monetary asset accounts (stages 1 to 3) are compiled in Austria based on the work carried out for the compilation of the European Forest Accounts (EFA). The issues discussed include main data sources used, identification of types of assets, compilation of forest land accounts and valuation of timber resources based on the stumpage value method.
Stage 1: (timber resources and forest land): Identifying types of assets and valuation methods
In order to estimate the volume of timber resources, forest land accounts are compiled first. For the case of Austria, the national forest inventory (NFI) serves as the primary source of information on forest land. While the data from the inventory is consistent with FAO’s thresholds for forest area, the challenge here is the allocation of the said forest area to the various woodland assets. The NFI differentiates between several silvicultural management types which can be used for the allocation. These include commercial and protective forests with and without yield. Each of these types may be composed of various sub-types: productive and non-productive forest land as well as bush areas. All these elements in their respective management types provide the basis (building blocks) for the allocation of the forest area and wooded land to the categories FAWS, FNAWS and OWL.
To differentiate between FAWS and FNAWS, the harmonised reference definitions proposed by (Alberdi et al., 2016[8]) (Forest Policy and Economics) is followed. The authors suggest a number of criteria for the allocation of forest area to FAWS or FNAWS. These include environmental, economic and social factors that severely impact or restrict the use of forest resources in economic activities. The assessment of the criterion profitability is challenging. Alberdi et al. (2020[9]) suggest to not consider short-term market fluctuations. It would still be a FAWS even if current harvesting is not taking place or if it is done only for own consumption. Environmental (protective functions) and economic restrictions (accessibility, slope, soil conditions) are the most important factors in Austria to distinguish FNAWS.
For the valuation of timber resource, the stumpage value method has been chosen. Directly observable stumpage prices do not exist in Austria. Instead, the road-side pick-up price minus harvesting and transport costs are used. So far, the user cost of fixed capital is not deducted.
For the EFA Austria does not compile the monetary value of the forest land yet. For the Austrian balance sheets, valuation of the forest land is carried out based on current market prices and assuming that the value of forest land is 50% of the value of grassland in the same region. In the balance sheets standing timber is currently accounted for as part of the inventory.
Stage 2: (timber resources): Collecting physical and price data
The NFI is the main source for Information on timber volume. It provides information on stocks as period averages in intervals of several years and on flows as averages between two inventory periods (observation period). Hence, additional work has been carried out to develop accounting principles and modelling approaches in order to derive annual stock and increment data from the NFI.
To derive annual stock data and to fill data-gaps on stocks between the inventory periods, an interpolation approach is used by allocating period averages to the NFI median years. This is supplemented by a more detailed method to obtain annual flow data on increment and mortality from dendrochronological surveys.
Additional primary and secondary sources, including surveys and literature (annual felling reports as the most important source), are used to gather information on timber removals and irretrievable losses, which serve as building blocks for an integrated accounting model. This model brings all the information together and provides comprehensive understanding of the flows of timber, from increment to withdrawal through harvests and irretrievable losses, while ensuring coherence among different data sources.
To get to the physical stocks, no adjustment for the percentage of annual increment that is expected to be harvested is made.
Source: Statistics Austria
Since there are no statistics on stumpage prices in Austria, the value of standing timber is estimated by deducting harvesting costs and transport costs for the prices of harvested timber (roadside pick-up price). Timber prices are taken from the agricultural producer price statistics of Statistics Austria. Harvesting and transport costs (transport to the roadside) applied to derive the stumpage prices for FAWS correspond to the annual average value recorded by the accountancy network of large-scale forest enterprises (>200 ha).
Stage 3: Building the monetary asset accounts for work-in-progress
Physical stock and flow data build the foundation for the monetary asset accounts of standing timber. The stumpage value method is used for the monetary valuation.
Disaggregation of the annual increment and timber stock into the product groups of coniferous and non-coniferous wood is based on the assumption that the composition of standing timber corresponds to a 15-year moving average of the assortment composition of loggings. In order to value both the increment and the stock using stumpage prices, conversion of the volumes of the stock and increment to m³ under bark is necessary. This is done by means of deducting the potential losses that take place in the course of felling, shaping, measuring saw logs, etc.
The resulting physical and monetary asset accounts for Austria are presented in the following figure and tables. Figure 5-4 shows a comparison of work-in-progress of standing timber in monetary and physical terms for the years 2000 to 2023. The two tables show the compilation of the physical and monetary asset accounts for timber using the Workbook on timber resources.
Source: European Forest Accounts, Statistics Austria.
Note: Net increment of timber is defined as natural growth (or gross increment) less natural mortality.
Stage 3 (forest land): Building the monetary asset accounts
445. Once the monetary asset accounts have been compiled for timber, the next stage is to compile the monetary asset accounts for the underlying asset: forest land. This means calculating the value of the composite asset comprising standing timber (work-in-progress) and the underlying asset (forest land), and then deducting work-in-progress from the composite asset value. This is preferably undertaken by using a direct market-based valuation of forest land (see country example France in Box 5-1). When market values are not available, valuation of the composite asset can be based on the NPV of future resource rents. The latter is the method described below for 2023 and illustrated in the Workbook: timber resources and forest land in the worksheets Underlying asset Year 1 and Underlying asset Year 2.
446. For this method, the following eight steps are required:
1. Calculate resource rents (past and present).
2. Project the physical asset account and physical output until end of the asset life of the resource.
3. Calculate the unit resource rent.
4. Smooth unit resource rents to address price volatility.
5. Project future resource rents.
6. Calculate NPV for the opening stocks.
7. Calculate NPV for the closing stocks.
8. Put together the monetary asset account.
447. It is worth noting that although these steps are illustrated in the Underlying asset worksheets, it is only in Step 8 that the estimates become those of forest land. Steps 1-7 are designed to calculate the NPV of future resource rent for the whole of timber production i.e. the composite asset value.
Step 1: Calculate resource rents (past and present)
448. To calculate the resource rent for timber production, the residual value method (RVM) should be applied, as described in Chapter 3. It is recommended to apply a top-down approach starting from national accounts aggregates for ISIC Division 2: Forestry and logging. As we are valuing timber resources and forest land for the provision of timber, it is important to restrict the scope of ISIC Division 2 to commercial timber harvesting and logging activities, hence excluding ISIC 023 Gathering of non-wood forest products.21 Table 5‑7 presents an example, which follows the steps of the RVM top-down approach set out in Figure3-1 in Section 3.3.1. The calculation is shown in the Workbook: timber resources and forest land in rows 4-20 of the Underlying asset Year 1 and Year 2 worksheets.
Note: Cells in green indicate input data; blue indicates calculated estimates. Specific taxes on products / specific other taxes on production should be recorded as rent payment (D45) when government is the legal owner.
Source: Workbook: timber resources and forest land, Underlying asset Year 2 worksheet.
449. Output in this table should be based on the accrual recording of output of timber, i.e. on the natural growth expected to be harvested (as derived in Table 5‑5), not on actual revenues generated from harvesting. This can be seen in the Underlying asset worksheets, row 6, where the value of output of timber for 2022 and 2023 needed for the calculation of resource rents comes from the calculation of net increment (output of timber) at the end of the work-in-progress worksheets.
450. Operating costs are linked to the cost elements used in compiling the physical asset account for timber, including the costs used to derive the stumpage prices. In the workbook, you can follow the links back to these calculations in the work-in-progress worksheets. Operating costs should be at least equal to the average costs (per species) times the removals (per species) in the work-in-progress worksheets.
451. Gross mixed income (GMI) is recorded for unincorporated enterprises when it is not possible to separate remuneration of employees from return to capital. In some countries, removals of timber for use as firewood will be important. When measuring the value of forest land, the inclusion of GMI may therefore be relevant. As discussed in Section 5.2.1 the key criteria for recognition as economic asset would be whether the extraction activity is of commercial scale. Firewood collection or indigenous use of resources, which is undertaken for commercial purposes, would therefore need to be included in the estimation of resource rent, but output generated for own use would need to be excluded. Unlike the situation of renewable energy production by households, remuneration of labour would likely not be negligible and it is recommended to make a suitable estimate (for instance by using the minimum or median wage in the forestry sector in combination with hours worked).
452. As explained in Section 3.3.1 the user costs consist of two elements: depreciation and a return to capital, specifically fixed assets. The value of depreciation (consumption of fixed capital in the 2008 SNA) is usually derived from a perpetual inventory model (PIM) and available as part of the national accounts. The asset life of the fixed assets could differ from the asset life of the natural resource, but in principle it should not be longer than the life of the natural resource.
453. The return to fixed capital is estimated by multiplying the value of fixed assets (row 22) with the rate of return, which is specified in cell H24. The rate of return is assumed to be 6% real in the example, but countries should apply their own rate of return.
454. After deducting both elements – depreciation and the return to fixed capital – from GOS and GMI for the derivation of resource rent, we obtain the resource rent.
Step 2: Project the physical asset account and physical output until end of the asset life of the resource
455. In the Workbook: timber resources and forest land, Underlying asset Year 1 (rows 30-43) and Table 5‑8, we simply project forward the opening and closing balances from the physical asset account for timber compiled in the work-in-progress worksheet. In 2022, we have an opening stock of 250 physical units, and a closing stock of 251 units. These figures are based on the last year and are assumed to remain constant in future.
456. We also project the net annual increment based on the ratio of the last period’s observed net annual increment to last period’s opening stocks (i.e. the closing stocks of the last period). This ensures that in case there are reappraisals or reclassifications that occur during the current accounting period (as is the case in our example), the expected growth for the next period takes these changes into account, ensuring consistency. We assume that the projected net annual increment remains constant for the remainder of the asset life of the resource. It is recommended to apply as a default asset life 100 years.22
457. More advanced methods (see Section 5.2.4) may consist in the use of a biophysical model which would allow for dynamic projections of future growth taking into account the current state of the forest (is the forest young or old), harvesting patterns, as well as risks due to fire etc.
Source: Workbook: timber resources and forest land, Underlying asset Year 1 worksheet.
Step 3: Calculate the unit resource rent
458. The unit resource rent is the resource rent (from Step 1) divided by the net annual increment during the same accounting period. It can be considered a price measure. The unit resource rent needs to be calculated for several years, as this is required for the next step. This is done in row 49 of the workbook.
459. It is important to emphasise that the unit resource rent is not the same as the stumpage price:
A stumpage price is an output price related to a finished, unharvested tree. A resource rent price reflects the overall return to the economic owner of a resource per unit of output. Estimating a resource rent price therefore requires deducting all relevant costs from the measure of output, including the user costs of produced capital involved in growing / maturing trees. For a forest resource as a whole, the costs will include silvicultural and other establishment costs. (EFA, §4.72)
As an illustration, suppose you have only silviculture activity, so no logging costs, then the stumpage price would be equal to the standardised (e.g. per m3) costs (intermediate consumption and compensation of employees) plus a mark-up for GOS/GMI. The (unit) resource rent would be part of the GOS/GMI after deducting depreciation and user costs of capital of fixed assets used in production and therefore be smaller than the stumpage price.
460. In the workbook it is assumed (as a convention) that the resource rent is generated in the middle of the accounting period and therefore reflects the average price level of the accounting period.23
461. In order to apply smoothing of unit resource rents in Step 4, we need to first bring the unit resource rent of the previous years to the same price level as the current accounting period (in this case 2023). This is done in the Year 1 worksheet by applying a price deflator in row 50 to the unit resource rent figure (row 49), obtaining – for each past year – the unit resource rent in mid-2023 prices (row 51). We use a fixed price deflator24 of 2% in the example but countries should apply their own price index (which may differ from year to year).
Step 4: Smoothing of unit resource rents to address price volatility.
462. We recommend assuming that the unit resource rent will remain constant in the projection period unless specific policies have been implemented which would allow us to estimate a specific path of future unit resource rents. As discussed in Chapter in Chapter 3, it is recommended to project future unit resource rents based on an average of actual unit resource rents for several years. Due to volatility in commodity prices, if we were to use only the unit resource rent of the last year, asset values would become highly volatile, which should be avoided because the main use of these values is to assess long-term macro-economic trends. The number of years used for smoothing will depend on the type of resource, but typically would range from three to ten years.
463. Under certain circumstances there may be good reasons not to smooth, for instance when futures markets provide a different signal compared with the long-term price trend or if there are expected to be changes in the regulatory regime.
Step 5: Project future resource rents.
464. We now multiply the smoothed unit resource rent in mid-2023 prices (cell F55) by the projected physical annual increment for the year in question (Underlying asset Year 1 worksheet row 45). This results in projections of future resource rents in mid-2023 (constant) prices in row 60.
465. Next, we project discounted future flows of resource rents using a discount factor for each projected year (Underlying asset Year 1 worksheet row 62). The discount factors are calculated from a real discount rate (cell B61). The opening stock is to be calculated (in Step 6) for the start of the accounting period (1 January) and the resource rents are assumed to arise in the middle of the accounting period as these activities occur mid-year on average, so we halve the discount factor in the first period (in this case 2023).
466. As the resource rent in future periods is expressed in constant prices, the discount rate used must be “real” (excluding inflation), as noted in Section 3.3.2 on Discounting future flows of resource rent. The Workbook: timber resources and forest land - Underlying asset worksheets use the real discount rate of 2% that is recommended as the common, stable rate by the EGNC (see Chapter 3). The resulting discounted projection of future resource rents is shown in the Year 1 worksheet row 63.
467. Countries may prefer to use a real discount rate that is higher or lower than the common, stable rate agreed by the EGNC. As noted in Section 3.3.2 Discounting future flows of resource rent, countries are free to set their own discount rates as long as they also include a valuation using the common agreed rate as part of sensitivity analysis. This is simple to do as part of Step 5: compilers need only change the figure in cell B61 from 0.02 (2%) to the desired rate.
468. Countries may also prefer to project resource rents including future price increases (e.g. stumpage price will increase with X percent per year). If so, a nominal discount rate which includes price changes must be used. However, it is easier to assume that the price of the resource remains constant and apply a real discount rate, and this is the method recommended in this compilation guide.
Step 6: NPV calculation for the opening stocks.
469. Now we are able to estimate the opening stock value (in this case of the year 2023) by applying the NPV equation (see Section 3.3.2).
470. In the Workbook: timber resources and forest land (Underlying asset Year 1 worksheet cell F67), we sum the discounted future resource rents to give the opening stock of assets. We obtain an opening asset value of the combined asset of 3 458.
Step 7: NPV calculation for the closing stocks – redo compilation 1-7 above
471. A year goes by, after which we redo compilation steps 1-6 using information now available (Underlying asset Year 2 worksheet in the Workbook) in order to estimate, in Step 7, the opening stock value of the year 2024 (which gives us the closing stock value of the year 2023).
Source: Workbook: timber resources and forest land, Underlying asset Year 2 worksheet.
472. From the physical asset account of timber resources, we know that during the accounting period we had some upward reappraisals of 7.2 physical units, as well as reductions due to reclassifications of 9, and a higher harvest level than anticipated (11.5 units), resulting in a closing stock of 247 units in 2023 (Table 5‑9). The column for 2023 is now coloured green as the figures are all actuals.
473. For the year 2023 we now also have measured data on output and user cost of fixed assets (included in column F of the Underlying asset Year 2 worksheet). This data is consistent with the changes assumed for roadside pickup prices. We again estimate the resource rent, unit resource rent, but now expressed in mid-2024 prices. Again, we do smoothing, and we have an opening stock value of the combined asset as at 1 January 2024 of 3 323. This is also the 2023 closing stock value. This figure can be found in cell G71 of the Underlying asset Year 2 worksheet.
474. The opening stock for 2023 (cell F67) is not re-calculated in the Underlying asset Year 2 worksheet, but instead taken from the Year 1 worksheet. This is because of the forward-looking (or ex ante) nature of balance sheets: their main purpose is to describe how the value of assets change over time, for instance due to growth, removals and reclassifications.
Step 8: Put together the monetary asset account.
475. We can now subtract the value of work-in-progress obtained earlier to obtain the NPV of the underlying asset (forest land): 3 458 minus 2 917 = 541 at the start of 2023 and 3 323 minus 2 971 = 353 at the start of 2024 (or the end of 2023). It is important to realise that these NPV estimates represent the value of the assets in current prices. The compilation of the monetary asset account in constant prices in discussed in Chapter 6.
476. It is possible to arrive at a negative asset value for the underlying asset, in case the value of work-in-progress is larger than the value of the composite asset. This is an indication that the work-in-progress is overvalued. To be consistent with the valuation of other natural resources, it is recommended to limit the value of the composite asset to the net present value of resource rents (or the market value of land in case market prices are used) and reassess the value of work-in-progress. This would entail checking the stumpage price (e.g. is the user cost of machinery used in transporting and logging included) and whether all (physical) stocks of standing timber are expected to be logged etc.
477. Table 5‑10 – from rows 75-82 of the Underlying asset Year 2 worksheet – shows how this can be used to calculate the price of the resource25 at the beginning and end of 2023, as well as the 2023 average price and average physical stock.
Source: Workbook: timber resources and forest land, Underlying asset Year 2 worksheet.
478. Table 5‑11 is the monetary asset account for forest land (see rows 84-99 of the Underlying asset Year 2 worksheet). This is produced by:
Opening and closing balances = NPV estimates in Table 5‑10.
Depletion and regeneration = the effect of removals minus the net increment on the underlying asset. If the result is positive, it is recorded as depletion; if the result is negative, it is recorded (as a positive number) in regeneration, and no value recorded in depletion.
Revaluation = Average physical stock * (Price of resource (2024) less Price of resource (2023)) from Table 5‑10. Revaluation will pick up both the effect of changes in the resource rent as well as changes in the extraction path to the extent they lead to changes in asset value.
All other rows = Estimate from physical asset account (Table 5‑9) * Average price (Table 5‑10).
479. In the worksheet, a check is included to ensure that the sum of opening stock value + all changes results in a closing stock equal to the opening stock estimate of the next year.
Source: Workbook: timber resources and forest land, Underlying asset Year 2 worksheet.
480. As expected (based on our assumptions), we find as key elements: upward reappraisals due to the increase in forest area available for wood supply. This has a direct effect on the value of timber resources, but also an effect on the forest land value as this area will continue to generate timber resources into the future. We also see a reduction in value due to catastrophic losses in the case of species B. There is a cost of depletion as we have overharvested during the accounting period. Then there is revaluations: we see a positive amount for revaluations in the monetary asset account for timber resources due to the assumed increase in roadside pickup price of species B. However, for forest land there is a negative value in the monetary asset account for revaluations. This is driven by the drop in the resource price due to the reduction in asset value (which is driven by the profitability of the resource extraction, which may or may not move in the same direction as the output price itself (the costs of extraction can have a dynamic of their own).
Stage 4: (timber resources and forest land): Integration
481. In Stage 4, the estimates compiled for the monetary asset accounts for work-in-progress: timber resources and for the underlying asset: forest land in Stage 3 are recorded in the sequence of economic accounts (standard SNA presentation) (see Table 5‑12). The description of the rows in the two accounts follows those in the monetary asset account for timber (Table 5‑5) and the monetary asset account for forest land (Table 5‑11). In the monetary asset account for timber, we refer to growth and removals, while in the monetary asset account for forest land we have estimates of depletion (positive or negative) of the natural resource.
482. The value of (net) natural growth expected to be harvested should be included as output in the production account (and hence GDP). This output is supplied by the forestry sector and used as additions to work-in-progress of cultivated biological resources. Compared with the 2008 SNA, there may be an impact on GDP due to the accrual recording of output for forest areas that previously were treated as non-cultivated (this will be further discussed in Chapter 6).
Note: * if split asset: part of the regeneration (recorded as negative depletion) allocated to the legal owner; ** if split asset: part of the cost of depletion allocated to the legal owner.
483. Depletion of the underlying asset is recorded as a cost of production, similar to depreciation (instead of other changes in the volume of assets and liabilities as it was in the 2008 SNA). This will be recorded in the production account, the capital account (and in the allocation of earned income account for the part of the depletion borne by the legal owner as negative imputed rent). Net regeneration of biological resources yielding once-only products is to be recorded as negative depletion. Due to natural variability, it is recommended to apply a bandwidth approach (e.g. if ratio of removals to net increment is within 95-105% assume sustainable use (hence no depletion nor regeneration). Any value difference is to be recorded as other changes in volume.
484. The revaluation elements are recorded in national accounts in other changes in assets accounts (specifically the revaluation account) and changes in balance sheets. Reappraisals (and catastrophic losses) are recorded in other changes in assets account (as other changes in volume) and changes in balance sheets.
485. Opening and closing stocks are part of the national accounts balance sheets (opening and closing balance sheet).
5.2.3. Specific topics
Damages and catastrophic losses
486. In some countries, removals due to damages can be significant in some years. In such cases it will be important to assess to what extent these are better described as catastrophic losses. Also, fellings due to damages (e.g. in case of pests) are likely worth less than planned fellings. This may cause issues when the net increment would be valued based on prices of healthy timber alone. It is therefore recommended when estimating a stumpage price to take an average of all timber eventually sold (i.e. a weighted average across different wood types and wood uses).
Deforestation and depletion
487. The SNA does not discuss land cover or land use change, which is the domain of SEEA CF and SEEA EA. The SNA is not a spatial framework, and the focus of analysis is on classic natural resources such as timber and fish. As a result, the 2025 SNA does not disaggregate land into different assets based on land use.26 The effects of land use change will be recorded in the capital accounts and balance sheets as economic appearance (K1) or as reclassifications (K6) depending on whether the land was already recognised as economic asset or not.
488. That said, deforestation and depletion are interrelated to the extent that depletion as a result of timber harvesting practices may result (eventually) in deforestation. However, this need not be the case for a number of reasons: depletion may occur in forests that remain forests (called forest degradation in the IPCC);27 deforestation may be caused by population pressures (e.g. due to fire wood collection) however these practices may not be sufficient to bring the forest within the SNA asset boundary and thus depletion will not be recorded; deforestation may result from pressures not caused by timber harvesting activities (e.g. agricultural practices or urbanisation); deforestation may result from indirect pressures (e.g. climate change).
489. Thus, while the SNA does not include land cover and land use accounts which provide the proper framing for assessing deforestation (and/or afforestation), the SNA would be expected to record cost of depletion due to timber overharvesting which is one of the drivers of forest loss.
Other uses of forests
490. Forests are not only used for the provisioning of timber but may generate a range of other benefits such as non-timber forest resources (e.g. gathering of berries and mushrooms) which are included as output in the SNA. As discussed, only in case of commercial use would these lead to recognition of AN3322 Non-cultivated biological resources yielding once-only products.
491. In addition, forests may also generate a range of non-material benefits such as water purification, carbon retention, or recreation services, usually described as regulating and/or cultural ecosystem services. As discussed in Section 2.3.2 ecosystem services lie outside the SNA production boundary and ecosystem assets lie outside the SNA asset boundary. In some cases, the value of ecosystem services may already be reflected in the observed market price of assets, for instance in case of amenity services provided by an urban park leading to higher real estate values. The treatment of ecosystem services is described in detail by the SEEA EA.
492. In some cases, payments take place for ecosystem services generated by forests, such as for carbon sequestration and/or carbon retention. Examples are REDD+ projects28 which are recognised under the Paris agreement. In addition, there are also private standards such as the Voluntary Carbon Standard that generate carbon credits from forestry projects that can be traded on markets.29
Canada has a substantial stock of forest land (Table 5‑13) and extensive timber operations across numerous geographical regions. Beginning in 2015, Statistics Canada began producing estimates of Canadian natural resource wealth estimates on a quarterly basis30 back to 1990 as part of the National Balance Sheet.31 With the increasing focus on natural capital as part of the update to the System of National Accounts (2025 SNA) Canada has revisited our current methodologies to ensure the comparability and relevance of our estimates.
Notes: The Arctic ecozones (Arctic Cordillera, Northern Arctic, Southern Arctic), and the Taiga Plains and Hudson Plains ecozones located in Nunavut, are not inventoried. These non-inventoried areas total 262,189.89 thousand ha.
Generated: 9/20/2024
Source: Canada's National Forest Inventory, first remeasurement 2022.
Statistics Canada’s physical timber asset account, discontinued for some time, provides data up to 2003. However, a wide variety of statistics relating to timber are tabulated by Natural Resources Canada, including the National Forest Inventory and the National Forestry Database. Unfortunately, testing has indicated that it is not currently possible to estimate the growing stock of standing timber or the net annual increment without additional work. Currently, Statistics Canada produces a monetary timber asset account primarily using establishment surveys of forest product companies. The revenue and cost data are compiled to produce estimates of resource rent for the extracted timber in each period which is described as a Tier 1 method in the guide.
As with other natural resources, a net present value calculation is applied to these resource rent estimates (Figure 5-5) for the life of the resource, which is assumed to be infinite given sustainable harvesting practices and based on the sheer volume of timber assets in Canada. This differs from the treatment of other commodities in Canada, which have a finite reserve life. In more recent years, concerns relating to the impact of climate change, including more prolonged and destructive forest fire seasons, have challenged this assumption. Similarly, it is important to monitor whether harvesting practices continue in a sustainable manner.
Preliminary testing found that, even without factoring in regeneration or unexpected events or additional investment, it would take approximately 70 to 100 years to exhaust Canada’s timber assets at the current rate of extraction. In this calculation, the portion of the forest that is valued is that which is accessible for harvesting, where commercially valuable species grow to a marketable size within a reasonable length of time, and where harvesting is allowed. Additional investment in infrastructure, such as service roads, would expand the timber assets accessible for harvesting. These projections would point to a much longer reserve life when factoring in future tree growth, which also serves as justification for assuming an infinite reserve life. At the same time, major losses of trees resulting from a catastrophic environmental event could also force a re-evaluation of this assumption.
The treatment of an infinite reserve life also has implications for the estimation of depletion. When reconciling between two successive periods, Canada assumes that the net increment is equal to net fellings and, thus, a situation of sustainable extraction without depletion prevails. Statistics Canada is planning to revisit the timber physical account and test this assumption regularly as years with depletion or negative depletion may occur.
Illegal logging
493. In case of illegal logging, different situations may need to be distinguished, depending on whether the asset was already recognised or not and whether the logging occurs on an incidental (one-off) or structural (ongoing) basis.
494. In case the illegal logging occurs structurally (2025 SNA, §13.22, §13.56, §27.36) where no asset was previously recognised (for instance in a protected forest/forest not available for wood supply) this may draw the composite asset into the asset boundary (assuming the logging serves a commercial purpose). This should be recorded first as K1 economic appearance of assets followed by K4 uncompensated seizure. Here it should be understood that the uncompensated seizure is not a seizure of the land itself (e.g. as in a situation of war), but of the work-in-progress and underlying asset i.e. the provisioning of timber. The logging itself leads to production and depletion of the forest land. In case the illegal logging occurs structurally where assets are already recognised, the same logic applies however there would be no need to first recognize the asset through a K1.
495. In case of irregular (incidental) illegal extraction at small scale: if the asset exists, K1 and K4 would only apply for the work-in-progress, not the forest land. In case the asset does not exist, illegal extraction would simply be ignored (as it does not concern a transaction (because it is illegal and there is no inventory to record a loss against), but if it is informal extraction (e.g. household gathering of firewood), it would be recorded as own account production).
5.2.4. Modifications to the standard approach
496. The approach described in Section 5.2.2 is to be understood as the default. As countries differ in their data availability and resources for conducing valuation of natural resource, this section describes also a Tier 1 or basic approach that would typically be followed in case of limited data availability and/or resources, as well as a possible advanced or Tier 3 methods requiring high data availability and resources.
Basic methods
497. During the 2020 FRA (FAO, 2020[10]) 183 countries and territories provided data on growing stocks out of a total of 236. While this represented 95% of the world’s forests, it also illustrates that there are quite a number of countries that do not collect information on growing stocks. The 2020 FRA has omitted the mean annual increment variable from the survey, so it is difficult to assess data availability for this aspect.
498. In the absence of information about growing stock and/or annual increment, a short-cut may consist in looking at the value of harvests as proxy for the accrual recording of output. This may be reasonable if the following two conditions are met: land cover data should indicate that no deforestation is taking place;32 there are a significant number of forestry companies in the country. From the perspective of the inventories, this entails estimating the additions to inventories by the withdrawals (i.e. the harvest).
499. The composite asset value could then be estimated based on the NPV of resource rents where the value of output consists of the observed harvests, together with the default asset life (see country example Canada in Box 5-4). This method would be the same as followed in the Workbook: fish resources, but instead of sales of gross catch/harvest, use the sales of removals. As no information about the growing stock would be available, it would be difficult to partition the composite asset into timber resources and the underlying asset. In those circumstances, the total asset value should be recorded under the asset category where the majority of value is expected to be.
500. In case deforestation takes place (as observed through changes in land cover), the same method could be used as above, however instead of using the default asset life of 100 years, the asset life should be estimated based on the average deforestation rate compared with the total forest area. As deforestation is usually lagging the actual depletion, this estimate should be understood as a lower bound and clearly indicated in the meta-data. Depletion could be estimated using a Tier 1 approach (see Section 3.5.4) by dividing the asset value by the expected asset life.
501. In case afforestation takes place, it is recommended to include a value of regeneration (recorded as negative depletion).
502. If few national data are available to allow estimation of timber resources and forest land, the global dataset compiled as part of the World Bank’s Changing Wealth of Nations program (World Bank, 2024[11]), may provide a good starting point. CWON estimates wealth for a large portfolio of countries (> 150 in the latest edition), in a high level of disaggregation of resources including also timber resources, covering a time series of 1995-2020.33 The CWON methodology is based on a NPV of resource rents and uses a range of mostly global data sources such as from the FAO for the estimates. Timber resources as used in CWON cover both standing timber and the underlying asset. CWON also estimates separately several forest related ecosystem services namely recreation, hunting, and fishing services, non-wood forest products and water retention services, but as discussed in Chapter 2 these services (and resulting ecosystem asset values) lie outside the SNA production boundary.
Advanced methods
503. There are a number of more advanced methods that can be applied depending on data availability.
504. The preferred approach for valuing timber resources and forest land would be to apply a hedonic pricing analysis using observed land transactions. Hereto, we would need to collect information about the characteristics of each transacted piece of land such as size, stocks of standing timber, location (e.g. proximity to roads, urban areas or surface water such as lakes), which would allow to do a regression analysis to estimate the relative value of these elements. Such a hedonic analysis would allow to directly differentiate between the value of the timber resources, the value of forest land and additional land value unrelated to timber provisioning.
505. Applying the consumption value method rather than the stumpage value method is also considered an advanced method. The consumption value method in concept is more accurate than the stumpage value method in its valuation of work-in-progress. However, it requires more detailed information about the composition of the harvest (in terms of different ages) as well as different stumpage prices for each age bracket.
506. There is however an alternative way of implementing the consumption value method that applies the so-called capitalisation of costs method. This method is not described in the SNA but referred to in the European System of Accounts (European Commission, 2013[12]): “In order to estimate in advance the value of output treated as work-in-progress, the value is based on the actual costs incurred, plus a mark-up (except for non-market producers)34 for the estimated operating surplus or mixed income.” (§3.47) The capitalisation of costs method derives an implicit capitalisation rate to fit the information on costs and output value, rather than using an external or assumed rate (such as the discount rate in case of the net income method). The method is illustrated in Table 5-14 below.
507. Essentially, the capitalisation of costs method allows to impute stumpage prices for trees of different age cohorts, which are typically not available from source data (but which are required for the consumption value method), using basic forestry cost information.
508. We need 3 inputs (all indicated in green) for this method to work (the numbers are mock-up numbers): the stumpage price of mature trees (12 in the example); the production costs of mature trees (8in the example)35, and the aggregate physical stocks. Next, we also need to provide a cost distribution profile across age cohorts (the grey cells); in the example it is assumed that most costs occur at the beginning for planting and ground clearance and at the end to prepare for logging, the remainder distributed evenly. Of course, this cost pattern may be adjusted based on country specific information.
509. We can then find a capital endogenisation factor (by trial and error essentially, in the example 0.130 – the orange cell) that equalizes the value of the work-in-progress at the end of age cohort 5 and the stumpage price (both 12). The factor itself is not relevant, what matters is that we obtain as a result the stumpage price for each age cohort. We can also check that the capitalisation cost method effectively distributes the operating surplus (in the example of 4) across age cohorts.
510. Now that we have obtained the stumpage price per age cohort, we can proceed with the consumption value method. Hereto, we need to multiply the physical stocks for each age cohort with the stumpage price for each cohort. Information about physical stocks per age cohort is usually not available in countries, but may be estimated for instance by assuming linear growth (and equal distribution). It is than easy to derive the physical stocks per age cohort based on the total physical stocks (54). As a final step we derive that the total work-in-progress amounts to 468, smaller than the stumpage value of 653 or the result obtained using the net income method (consistent with Figure 5-2) that have been included for comparison purposes. In short, the capitalisation of costs method allows to implement a consumption value method by using data that are likely to be available in countries (stumpage price, data on costs, and a cost profile, total physical stocks).
511. There exist also variations of this approach that may be applied depending on data availability. For instance, in case countries have data about physical stocks per age cohort (e.g. from a forest resource assessment) the costs per m3 can be first multiplied with the physical stocks to obtain total costs for the forestry sector which can then be compared and scaled to the actual costs as recorded in national accounts. After this step one could proceed as above with distributing the mark-up across age cohorts using the capitalisation cost method and apply the consumption value method.
512. Finally, applying the RVM by focusing on ISIC 021: Silviculture and other forestry activities, instead of silviculture (instead of ISIC 02: Forestry and logging) is also considered an advanced method. The reason being twofold: choosing this sharper delineation clearly follows the distinction between the two different products that are produced in forestry and logging, namely standing trees by silviculture and logs (roundwood) by logging. The output of standing trees provides the direct link to the timber resources (and the value of the land in its capacity to continue generating timber), that we are trying to value. Second, for the estimation of resource rent, there should in principle exist a link to the economic ownership of the resource used in production. Silviculture typically is the economic owner of the timber resources, reaping the risks and rewards (e.g. in case of a forest fires the loss is for the silviculturist), which is typically not the case for logging companies. This of course requires that the national accounts are compiled at that level of detail.
5.3.1. What to include in the national accounts
513. The treatment of aquatic resources is complex as these resources are quite different in nature (e.g. aquaculture versus wild fish). They sometimes move across economic territories as defined for national accounts purposes; national resources can be accessed and impacted by non-resident units (and vice versa); and the resources (e.g. fish stocks) themselves are usually not directly observable: it is only possible to estimate them through what fishermen catch. In this section we will start by distinguishing between different types of fishing activities. We will then discuss how the SEEA describes aquatic resources. This will be followed by a clarification of SNA production and asset boundaries.
Fishing and aquaculture
514. The term aquatic resources is not used as such in the 2025 SNA asset classification, however it is useful to define this term for purposes of this guide. Aquatic resources are much broader than marine fish resources, and also include crustaceans, molluscs and other marine organisms and products (e.g. aquatic plants, pearls, sponges etc). ISIC Revision 4 and Revision 5 (Table 5‑15) distinguish at the group level between Fishing and Aquaculture, with further disaggregation at the class level between marine and freshwater fishing. The importance of aquaculture is increasing (Figure 5-6) with aquaculture overtaking fishing globally in 2022 in terms of aggregate production (in physical tons). Aquaculture resources (cultivated aquatic resources) are in principle recorded as work-in-progress, however in exceptional circumstances may also be under animal resources yielding repeat products (2025 SNA, §11.215). Nevertheless, the focus of this guide is on non-cultivated fish resources (classified under AN3322), i.e. fishing (sometimes called capture fishery) because the 2025 SNA follows the same treatment for aquaculture (cultivated resources) as in the 2008 SNA. Aquaculture is briefly discussed in Section 5.4.3.
Source: ISIC Revision 5.
Note: red is aquaculture production; blue is capture fisheries production; green: total.
Source: FAO 2024 ([13])
515. Another breakdown that is sometimes used (World Bank, 2021[14]) is between industrial, artisanal, subsistence, and recreational fisheries. The difference between artisanal and industrial fishing is primarily one of scale, with both types of activities included in the SNA production boundary. Subsistence fishing is included in the SNA production boundary and may be part of the non-observed economy. Recreational fisheries can be neglected for purpose of national accounts measurement, because in most cases the caught fish are being released.
Delineating fish resources
516. In this section we will clarify the scope of fish resources (included under AN3322 non-cultivated biological resources yielding once-only products) to be measured in national accounts. It is helpful to recall the SNA asset boundary: “Assets as defined in the SNA are entities that must be owned by some unit, or units, and from which economic benefits are derived by their owner(s) by holding or using them over a period of time.” (2025 SNA, §1.68) In case of fish resources, the SNA stipulates: “Assets over which ownership rights have not, or cannot, be enforced, such as open seas or air, are excluded, unless exclusive right on the resources are established, for example in the form of quota regimes for capturing fish.” (2025 SNA, §11.22) Furthermore,
In cases where there is no effective management of the fish stock or an associated water body, then there is no legal owner and consequently no asset is recorded on the balance sheet notwithstanding the resource rent that may be earned by fisherman. This treatment is consistent with economic theory where the resource rent in open access fishery contexts will tend to zero and hence there will be no balance sheet value of the stock to record in an SNA context. (2025 SNA, §27.38).
517. Therefore, fish stocks that are not exploited or are not subject to a quota regime would not constitute assets in the SNA (although they would likely be included in the SEEA which has a broader asset boundary).
518. There are however a few specific cases to consider. Fish resources would generally be restricted to resources within water bodies under the administration or management of economic units (usually government) corresponding with the exclusive economic zone (EEZ) of a country (2025 SNA, §27.37). However, the 2025 SNA is clear that also “fish stocks in the high seas which are subject to international agreement on how much may be caught by individual countries may be counted as falling within the asset boundary.” (§11.206) Secondly, illegal or subsistence fishing in a country’s national waters for commercial purposes (either by resident or non-resident operators) would lead to the recognition of an asset, as discussed further in Section 5.3.3. The recommendations for recognition of fish resources as assets can be summarised as follows: the existence of a quota regime is a sufficient condition for recognition as assets, but not a necessary condition: in some situations the SNA may recognize fish resources not subject to a quota regime as assets for instance when they are exploited commercially.
519. The 2025 SNA36 also specifies that capture fisheries should be treated as non-cultivated assets. This implies that we should record their catch as output of the fisheries sector (ISIC group 031), by contrast with timber resources where it is the growth of the stocks that is recorded as output. Furthermore, similar to the treatment of timber, the 2025 SNA (§13.21) makes a conceptual distinction between the current resource and the underlying asset: “The value of these biological resources may consist of two elements: the natural growth of fish itself, and the value of the underlying asset (i.e. the geographical area through which the fish migrates). In the latter case, the value is often encapsulated in the value of the quota put in place.” The area through which the fish migrates can be understood here as the fishery or fishing ground. However, for practical purposes, due to the lack of data on physical stocks, it may be difficult to value both components separately. Moreover, the two elements would not obtain a different accounting treatment unlike timber where we distinguish between timber resources (recorded under AN3332 work-in-progress on cultivated biological resources yielding once-only products) and forest land (AN31 land), as the composite asset as a whole is considered a non-produced asset recorded under AN3322 non-cultivated biological resources yielding once-only products (there is no work-in-progress as in the case of timber resources). We will use the term fish resources to describe the composite asset in these guidelines.
520. According to the SEEA CF (§5.398) “The aquatic resources for a given country comprise those resources that are considered to live within the Exclusive Economic Zone (EEZ) of a country throughout their life cycles, in both coastal and inland fisheries. Migrating and straddling fish stocks are considered to belong to a country during the period when those stocks inhabit its EEZ.” It is important to further clarify what this entails.
521. The SEEAF (UNSD, 2006[3]) includes a very helpful classification:37
Shared fish stocks are understood (see, in particular, the FAO Code of Conduct of Responsible Fisheries, article 7.1.3) to include the following:
Fish resources crossing the EEZ boundary of one coastal State into the EEZ(s) of one or more other coastal States (transboundary stocks);
Highly migratory species, as set forth in annex 1 of the United Nations Convention on the Law of the Sea (United Nations, 1982), consisting primarily of the major tuna species. Being highly migratory in nature, the resources are to be found both within the coastal State EEZs, and the adjacent high seas;
All other fish stocks (with the exception of anadromous and catadromous stocks)[38] that are to be found, both within the coastal State EEZ and the adjacent high seas (straddling stocks);
Fish stocks to be found exclusively in the high seas (discrete high seas fish stocks). (SEEAF, §2.48)
Figure 5-7 summarises the main possibilities regarding the inclusion of different types of fish stocks for compiling national accounts. The columns describe various types of situations that can occur.
Source: Authors.
The assets to be included in the national balance sheet (yellow) consist in first instance of non-migrating resources that are subject to a quota regime and part of the national EEZ. It may also include part of the transboundary stocks (shared with neighbouring country(ies)) and/or straddling stocks to the extent these are subject to quota regimes. For a proper physical asset account (required for the SEEA but not for the SNA) an assumption would need to be made how much time the fish spend in each EEZ and apportion the stock accordingly. For the SNA it would be sufficient to rely on information about actual harvest taking place in the national EEZ and the high seas (subject to quota regime).
Regarding gross catch/harvest (output), this should include all fish caught by resident operators regardless of location (in national EEZ, other EEZ or the high seas). “By convention, the output associated with the harvest of these resources is allocated to the country of residence of the operator of the vessel undertaking the fishing rather than to the country in which the resources are located.” (2025 SNA, §27.46) This would include for instance resident fishermen fishing in another country’s EEZ. The income generated through these activities would be included in the GDP of the economy of the fisherman, however these fish stocks would not be included on the national balance sheet as they are part of the foreign country’s natural resources. Likewise, access rights may have been provided to foreign operators to fish in national waters. These catches should be recorded as reductions in stocks in the national balance sheet.
522. Therefore, we arrive at the following relations between the production and asset boundaries:
Monetary output = catch by resident operators
(+) Catch by non-resident in the national EEZ
(-) Catch by resident operators in other countries EEZ
(-) Non-commercial catch (e.g. subsistence fishing by resident and non-residents)
= boundary for fish resource assets in national balance sheet
(= commercial national EEZ catches + high sea catches by resident operators)
5.3.2. Compilation stages
523. Regarding the measurement of fish resources, four compilation stages are distinguished: identifying the types of assets and valuation methods; collecting the physical data; building the monetary asset accounts; and integration of the results into the sequence of economic accounts.
Stage 1 (fish resources): Identifying types of assets and valuation methods
Identifying types of assets
524. It would be important to start with compiling a list of fish stocks occurring within the national EEZ and waters (frequently) visited by resident operators (other EEZs, high seas). In the absence of national data, international databases could be used as starting point such as: https://standardgraphs.ices.dk/stockList.aspx. Also the FAO has a database on marine fisheries by species, country and year: https://www.fao.org/fishery/en/collection/global_production?lang=en.
525. The relevant international classifications pertaining to fish species should be used. As indicated by the SEEA CF:
The Aquatic Sciences and Fisheries Information System (ASFIS) list of species contains over 11,500 species, and is commonly used as the standard reference for fisheries production. It is linked to the FAO International Standard Classification for Aquatic Animals and Plants (ISCAAP) which divides commercial species into 50 groups on the basis of their taxonomic, ecological and economic characteristics FAO classification. (§5.404)
526. The SEEA-AFF (§3.156) contains an aggregated list of 12 major groups based on the International Standard Statistical Classification of Fishery Commodities. (ISSCFC): Freshwater fish; Diadromous fish; Demersal fish; Tuna, bonito, billfish; Other pelagic fish; Other marine fish; Crustaceans; Cephalopods; Other molluscs; Aquatic mammals; Other aquatic animals; Aquatic plants, algae.39
527. The SNA is exhaustive, implying that all assets with economic value within the asset boundary should be estimated. However due to the resource-intensive nature of the valuation of fish resources, it is proposed to apply a materiality threshold and focus on the valuation of assets that contribute more than 5% of output in ISIC 031 (Fishing), and for which the long-term average contribution of Fishing to GDP is at least 0.1%. When a reasonable estimate can be made of how much of the asset value is missed, it is recommended to gross up the asset value.
528. It is recommended to use the 12 major groups as a checklist to assess which fish resources are available in the country and would be above the threshold in terms of output.40 For the national accounts it is sufficient to report the aggregate asset value under AN3322 non-cultivated biological resources yielding once-only products.
Valuation methods
529. Regarding valuation methods, according to SEEA CF (§5.442), there are two main possibilities. “One is to value the aquatic resource using the value of long-term fishing licences and quotas where realistic market values are available. The other is to base the value on the net present value of the resource rent of the aquatic resources.” We will first discuss the possibility to apply market values of quotas for valuing the resource.
530. As indicated in the SEEA-F (UNSD, 2006[3]):
An increasingly frequent approach to managing marine fisheries is by means of harvesting quotas. They are usually allocated by the Government (which is responsible for ensuring their enforcement as well) and may apply both to fishing within the waters of the country’s EEZ and to fishing on the high seas. Quotas typically apply to a particular fish stock. They may be allocated for free based on such criteria as historical catches by fishers or fishing firms and/or allocated to communities in locations where fishing is the main source of livelihood. They may also be auctioned or allocated in other ways (e.g. by lottery). A quota may be valid for one year only but is typically valid for a longer period, and often in perpetuity. It may be tradable to third parties or not. Even if not tradable, in certain circumstances it may still be transferable; say, from one generation to the next. (§2.102)
531. As discussed in Chapter 3, and discussed in 2025 SNA (§27.41-43) under some circumstances the value of quota sales can be used to value the fish resource. Necessary conditions are that the right was required during an open competition or when it is transferable i.e. it may be sold to other economic agents.
532. This is further discussed in SEEA-F (§2.61): “Some fisheries are managed under a system of freely tradable individual fishing rights, individual transferable quotas (ITQs). Under the right circumstances, the trading prices for ITQs can reflect the asset value of a fishery. However, only a few fisheries are managed through ITQs, and thus such quota markets do not exist. Even when ITQs are used, the market may be “thin” or subject to other constraints that distort the quota price.”
533. If rights have been granted to a foreign economy, it is likely that some form of payment takes place (e.g. for allowable catch quota). There are various types of quota (transferable, tradeable), for a limited number of years or in perpetuity. In case of quotas for a limited number of years, the value of the quota will not represent the total value of (that part of) the resource. However, the compiling economy would likely have a view on the value of its fish stock, if only to be able to negotiate fish quotas with foreign operators, for instance based on the resource rents captured by resident operators (under comparable circumstances).41 The actual payments would be recorded as rent (received from the rest of the world) in the national accounts. In case no information is available for estimating the fish asset (e.g. in case there is only fishing by non-resident operators), the rent payments can be used (through NPV) to estimate the value of the fish asset.
534. In most cases, however, the residual value method (RVM) would be applied to estimate asset values for fish resources as the NPV of future resource rent (see Chapter 3). This method is discussed in detail in the remainder of this section.
Stage 2 (fish resources): Collecting physical data
Gross catch/harvest
535. While it would be advantageous to compile a full physical asset account for fish resources, it is recognised that this may not be possible for many countries due to data constraints, so this is considered an advanced method.
536. The most essential piece of physical data that is required for the default approach to the compilation of the monetary asset accounts and national accounts lines is gross catch/harvest (physical output). In most countries, what is statistically observable is the catch by resident operators of different species. The catch from non-resident operators will generally not be observable and may need to be estimated. As explained in paragraph §0 in the national balance sheet would be included both catch by resident and non-resident operators (of a commercial nature) in the national EEZ plus catch in high seas by resident operators.
537. There are different concepts corresponding with different stages of the catch (United Nations et al., 2014[6]) – as defined by FAO):
a) Gross removal: the total live weight of fish caught or killed during fishing operations;
b) Gross catch: the total live weight of fish caught (gross removal less pre-catch losses);
c) Retained catch: the total live weight of fish retained (gross catch less discarded catch;
d) Landings: the net weight of the quantities landed as recorded at the time of landing;
e) Nominal catch: the live weight equivalent of the landings. (§5.428)
538. As indicated by SEEA CF (§5.429): “The most common catch concept used in practice is that of “landings”. Landings are directly linked to the economic value of the product. However, this measure excludes the discards of organisms incidentally caught through harvesting activity (discarded catch) as well as the amount of the catch used for own consumption.” The best measure for estimating depletion is gross removals, so this is the preferred approach for national accounts compilation; but landings is a good alternative option. It is also important to separately identify within gross removals or landings by resident operators the part associated with fishing in national waters (the national EEZ) versus the part associated with other country’s EEZs and fishing in high seas because this will be important for estimating asset values (as shown in Figure 5-7).42
539. In case national data is not available, a possible global data source may exist in Sea Around Us (SAU),43 a research initiative at the University of British Columbia and the University of Western Australia. SAU have developed a:
[C]atch reconstruction database which utilizes data from various sources including published literature, informal reports and expert knowledge to derive estimates for all fisheries components missing from the officially reported data. SAU provides catch time series by flag state, fishing sector, species, and catch type starting from 1950 and also links the data to other fisheries-related information for every maritime country including the ex-vessel price data developed by the Fisheries Economic Research Unit (FERU) of the University of British Columbia, cost of fishing and the government subsidies. (World Bank, 2021[14])
The data is also spatially explicit/available per grid cells. The cost data distinguishes between different gear types (e.g. dredgers, drift and/or fixed netters), and boat size (e.g. vessels under 12 m or 15 Gigaton, over 24m and 100 Gigaton).
Assessing stocks to estimate asset life
540. In order to estimate the asset value (and how it changes over time), we need to know the asset life of the resource. This will depend on how the fish stocks are managed.
541. The preferred option would be to use stock assessments for all the species identified within the previous stage. For instance, the United Kingdom (see Box 5-6) uses stock assessments from the International Council for the Exploration of the Sea (ICES) to assess, for each fish species in its waters, whether fishing is sustainable44 checking two elements: whether fishing pressure is at or below levels capable of producing Maximum Sustainable Yield (MSY) and whether spawning biomass for each stock is sufficient for MSY.
542. As an example, Figure 5-8 provides (part of) a stock assessment of anchovy in the Bay of Biscay. For non-migrating/non straddling fish stocks, it is common to talk about fisheries i.e. the location of the stocks. The advice is that total catch should be no more than 33 000 tonnes in 2024. This type of information can be contrasted with the actual catch, to assess whether depletion (or regeneration) is taking place.
Source: International Council for the Exploration of the Sea. Excerpt from ICES Advice on fishing opportunities, catch, and effort
Bay of Biscay and the Iberian Coast ecoregion. Published 08 December 2023
543. Such stock assessments may not exist for many fisheries in the global south. A good starting point may exist in the RAM Legacy Stock Assessment Database (RLSADB)45 which “includes most of the publicly available stock assessments conducted around the world, contains information on just over 1 300 stocks.” (Ovando et al., 2021[15])
544. The second-best option would be to collect catch per unit effort (CPUE) data as suggested in the SEEA CF and SEEA AFF. Increasing levels of catch effort for comparable catch would provide a clear indication of depletion. An exciting recent development has been the use of satellite data to track fishing effort (Paolo et al., 2024[16]), which can be compared with actual catch data. This would constitute an advanced method (see Section 5.3.4).
545. The third option, which was used in the context of CWON (World Bank, 2021[17]) and UNEP’s Inclusive Wealth report (UNEP, 2023[18]), would be to use time series information about catch (landings) to deduce sustainability following a scheme as in Table 5‑16: if the landing within the accounting period is less than 10-50 % of the max landing recorded earlier it can be assumed that the stock is overexploited. This requires however the availability of a time series of sufficient length for individual species.
Note: *Post-maximum minimum (post-max. min.) is the minimum landing after the maximum catch.
Source: (World Bank, 2021[14]) (Table 9), sourced from www.searoundus.org. http://www.searoundus.org/
546. The final option would be to rely on other indicators of condition of the fishery/fish stock such as water quality, harvest of related species (predator-prey relationships) to deduce a status and ultimately asset life of the species in question.
547. Whichever data source and method is applied, at the end of this stage, we should have an idea for each species included in national boundaries of its sustainability and asset life, which is important information for both the estimation of asset values and for estimating cost of depletion in the next stage.
548. This information can be presented by species, identifying whether each fish species is overexploited, exploited (but managed sustainably) or rebuilding. The Workbook: fish resources and Table 5‑17, present an example where fishing activity is dominated by three species responsible for 50%, 30% and 20% of fisheries output respectively, and with species A and C overexploited.
549. If it is not possible to estimate the asset life of each fish species, but it is known that the species is in scope of the asset boundary and is sustainably managed, a default asset life can be used. In this case, rather than using an infinite asset life, it is recommended to use a finite asset life of 25 years as the default in light of the critical state of most of the world’s fisheries, unless compilers have better information about the expected asset life.
Source: Workbook: fish resources, Stage 2 Physical data worksheet.
550. For overexploited and rebuilding resources, preferably, we would use fishery-specific information, sourced from a fisheries management authority when available. If that type of information is not available, an expert guess could be made of the asset life, with ten years used as the default asset life.
Stage 3 (fish resources): Building the monetary asset accounts
551. After collecting the physical data, the next stage is to compile the monetary asset accounts. These provide information on stocks and changes in stocks that are needed to populate the natural resource lines in the 2025 SNA, including estimates of the cost of depletion and various entries in the capital accounts and balance sheets.
552. Eight steps are required to compile the monetary asset accounts, as shown in the example for the year 2023 in the Workbook: fish resources, which is discussed below. The eight steps are:
1. Calculate resource rents (past and present).
2. Project the physical asset account and physical output until end of the asset life of the resource.
3. Calculate the unit resource rent.
4. Smooth unit resource rents to address price volatility.
5. Project future resource rents.
6. Calculate NPV for the opening stocks.
7. Calculate NPV for the closing stocks.
8. Put together the monetary asset account.
Step 1: Calculate resource rents (past and present)
553. When using the RVM to calculate resource rents (see Section 3.3), a distinction can be made between a top-down approach using information included in the national accounts or a bottom-up approach applying information from other data sources such as business statistics. For valuing fish resources, it is recommended to apply a top-down approach departing from national accounts information on gross operating surplus (GOS) of ISIC group 031 - Fishing. In contrast to the treatment of timber where the output consists of the natural growth (i.e. not the actual harvest), here the output is based on the catch.
554. Table 5‑18 presents an example for Species A, which follows the steps of the RVM top-down approach set out in 3.1. The calculation is shown in the Workbook: fish resources in rows 6-25 of the Year 1 and Year 2 worksheets. It is assumed Species A is overexploited as seen by the diminishing resource rent over time. The same steps would need to be undertaken also for the other species.
Note: Cells in green indicate input data; blue indicates calculated estimates. Specific taxes on products/specific other taxes on production should be recorded as rent payment (D45) when government is the legal owner.
Source: Workbook: fish resources, Year 2 worksheet.
555. The main difficulty here is the aggregated nature of the top-down information. For the valuation of the aquatic resources two distinctions are important. First, as the intention is to calculate asset values, it is important that only the part of the resource rent that is generated within the national EEZ or high seas is included (see Figure 5-4). Second, the resource rent should be split between the most important species groups. Such a split should preferably be made based on relevant data on output, costs and capital stocks for each species group. However, if that is not feasible, the split can be proxied based on output shares. As a result, one should obtain a time series of (past and present) resource rents for each of the main species that are in scope.
556. It is assumed that countries that have a significant fisheries industry already compile figures for the production and generation of income account and therefore have estimates of GOS for the relevant industries as a starting point for the top-down approach, so we do not cover compilation of these figures in this guide. However, some guidance may be helpful for estimating specific taxes/subsidies, and this is discussed in Chapter 3.
557. Gross mixed income (GMI) is recorded when it is not possible to separate remuneration of employees from return to capital, for instance in case of household fishing activities. In some countries, the inclusion of GMI may therefore be relevant. As discussed in Section 5.2.1 the key criteria for recognition as economic asset would be whether the fishing activity is of commercial scale. Subsistence fishing activity would therefore need to be excluded in the estimation of resource rent. Unlike the situation of renewable energy production by households, remuneration of labour would likely not be negligible and it is recommended to make a suitable estimate (for instance by using the minimum or median wage in the fisheries sector together with hours worked).
558. As explained in Section 3.3.1 the user costs consist of two elements: depreciation and a rate of return to capital (excluding natural resources), specifically fixed capital. The value of depreciation (consumption of fixed capital in the 2008 SNA) is usually derived from a perpetual inventory model (PIM) and available as part of the national accounts. The asset life of the fixed assets could differ from the asset life of the natural resource, but in principle it should not be longer than the life of the natural resource.
559. The return to fixed capital is estimated by multiplying the value of fixed assets (row 22) with the rate of return, which is specified in cell H24. The rate of return is assumed to be 6% real in the example, but countries should apply their own rate of return.
560. After deducting both elements – depreciation and the return to fixed capital – from GOS and GMI for the derivation of resource rent, we obtain the resource rent.
To provide some context and manage expectations, the World Bank’s Changing Wealth of Nations report (World Bank, 2021[17]) includes an assessment of the value of fisheries for about 110 countries including a time series from 1995-2018. The analysis distinguishes between private rent (operating surplus) and economic rent (resource rent) where the value of subsidies have been deducted. It finds that in 2018 global economic rent of all fisheries as a whole was negative, with 89 out of 110 countries recording negative rents (see map below). To the extent that this analysis would be corroborated by national data / estimations, this would imply zero asset value and also zero depletion for most countries in the world.
Source: World Bank (2021[17]).
Step 2: Project the physical asset account and physical output until end of the asset life of the resource
561. As indicated in Stage 2, for the standard approach it is not deemed realistic that countries compile physical asset accounts for fish as most countries only have available data on catch or landings. In the Workbook: fish resources (Year 1 worksheet, rows 33-44) most of the lines are therefore not compiled. We only require row 39: gross catch/harvest. In the example, we assume that in 2023 we have landings of ten physical units (e.g. tons of herring) which is assumed to remain constant (see Chapter 3).
562. For the asset life, it is recommended to base this on the status of the individual species groups. After stage 2, we should have an indication of the asset life of the fish resource (Species A). In the example, we assume it to be ten years in the Stage 3 Year 1 worksheet, and nine years in the Year 2 worksheet.
Step 3: Calculate the unit resource rent
563. The unit resource rent is the resource rent (from Step 1) for a species divided by the gross catch/harvest during the same accounting period. It can be considered a price measure. The unit resource rent needs to be calculated for several years, as this is required for the next step. This is done in row 48 of the workbook.
564. In the workbook it is assumed (as a convention) that the resource rent is generated in the middle of the accounting period and therefore reflects the average price level of the accounting period.46
565. In order to apply smoothing of unit resource rents in Step 4, we need to first bring the unit resource rent of the previous years to the same price level as the current accounting period (in this case 2023). This is done in the Year 1 worksheet by applying a price deflator in row 49 to the unit resource rent figure (row 48), obtaining – for each past year – the unit resource rent in mid-2023 prices (row 50). We use a fixed price deflator of 2% in the example but countries should apply their own price index (which may differ from year to year).
Step 4: Smooth unit resource rents to address price volatility
566. We recommend assuming the unit resource rent will remain constant in the projection period unless specific policies have been implemented which would allow us to estimate a specific path of future unit resource rents. As discussed in Chapter 3, it is recommended to project future unit resource rents based on an average of actual unit resource rents for several years. Due to volatility in commodity prices for several natural resources, if we were to use only the unit resource rent of the last year, asset values would become highly volatile, and hard to cope with in the national accounts. Moreover, current unit resource rent will likely not be a good predictor of future resource rents. The number of years used for smoothing will depend on the type of resource, but typically would range from three to ten years.
567. Under certain circumstances there may be good reasons not to smooth, for instance when futures markets provide a different signal compared with the long-term price trend or if there are expected to be changes in the regulatory regime.
Step 5: Project future resource rents
568. We now multiply the smoothed unit resource rent in mid-2023 prices (cell F54) by the projected physical production for the year in question (Year 1 worksheet row 39). This results in a projection of future resource rents in mid-2023 (constant) prices in row 59.
569. We project discounted future flows of resource rents using a discount factor for each projected year (Year 1 worksheet row 61). The discount factors are calculated from a real discount rate (cell B60). The opening stock is to be calculated (in Step 6) for the start of the accounting period (1 January) and the resource rents are assumed to arise in the middle of the accounting period as these activities occur mid-year on average, so we halve the discount factor in the first period (in this case 2023).
570. As the resource rent in future periods is expressed in constant prices, the discount rate used must be “real” (excluding inflation), as noted in Section 3.3.2 on Discounting future flows of resource rent. The Workbook: fish resources example uses the real discount rate of 2% that is recommended as the common, stable rate by the EGNC (see Chapter 3). The resulting discounted projections of future resource rents is shown in the Year 1 worksheet row 62.
571. Countries may prefer to use a real discount rate that is higher or lower than the common, stable rate agreed by the EGNC. As noted in Section 3.3.2, countries are free to set their own discount rates as long as they also include a valuation using the common agreed rate as part of sensitivity analysis. This is simple to do as part of Step 5: compilers need only change the figure in cell B60 from 0.02 (2%) to the desired rate.
572. Countries may also prefer to project resource rents including future price increases (e.g. the average price of fish resources, Species A, will increase with X percent per year). If so, a nominal discount rate which includes price changes must be used. However, it is easier to assume that the price of the resource remains constant and apply a real discount rate, and this is the method recommended in this compilation guide.
Step 6: Calculate NPV for the opening stocks
573. Now we are able to estimate the opening stock value (in this case of the year 2023) by applying the NPV equation (see Section 3.3.2 Net Present Value method). In the Workbook: fish resources (Year 1 worksheet cell F66), we obtain an opening asset value as of 1 January 2023 of 624.
Step 7: Calculate NPV for the closing stocks
574. A year goes by, after which we redo compilation steps 1-6 using information now available (Year 2 worksheet in the Workbook: fish resources) in order to estimate, in Step 7, the opening stock value of the year 2024 (which gives us the closing stock value of the year 2023).
575. For the year 2024, we now also have measured data on output and user cost of fixed assets (included in column F of the Year 2 worksheet). We again estimate the resource rent, unit resource rent, but now expressed in mid-2024 prices. Again, we do smoothing, and we have an opening stock value for 2024 of 554, which is also the 2023 closing stock value. This figure can be found in cell G71 of the Year 2 worksheet. The opening stock for 2023 (cell F67) is not re-calculated in the Year 2 worksheet, but instead taken from the Year 1 worksheet. This is because of the forward-looking (or ex ante) nature of balance sheets: their main purpose is to describe how the value of assets change over time.
576. We should repeat Steps 1-7 for all major species groups that are distinguished, hence in the example we should do this for all three species. However, this is not shown in the Workbook: fish resources.
Step 8: Put together the monetary asset account
577. We now have the NPV of each species of fish resources at the start of the accounting period (624 for species A as of 1 January 2023) and end of the accounting period (554 as of 1 January 2024, or end of 2023). It is important to realize that these NPV estimates represent the value of the assets in current prices. The compilation of the monetary asset account in constant prices in discussed in Chapter 6.
578. The approach to estimate the cost of depletion differs from the method applied for the other resources as we do not have a physical asset account. The cost of depletion in 2023 (Table 5‑19) can be calculated by applying the approach described in Section 3.5.4 Depletion and tiers by dividing the NPV for opening and closing stocks by the corresponding asset life from Table 5‑17, and taking the average.
Source: Workbook: fish resources, Year 2 worksheet.
579. If fish resources are sustainably managed, there is no depletion (by definition). Therefore, if the example shown was for Species B instead of Species A (see Table 5‑17), no depletion would be recorded in the accounts. Also, if species B remains sustainably managed while Species A and C are overexploited, in the next year that we compile the worksheets, the asset lives of Species A, B and C would be 9, 25 and 4 years respectively. The asset lives of Species A and C would then be reduced by one year each year, while that of Species B would remain at 25 years. In case eventually only Species B would be left, we would stop recording depletion.
580. It should also be noted that the cost of depletion is restricted to the effects of overharvesting. In case fisheries are directly damaged (for instance by practices such as bottom trawling), these reductions in value – if they can be estimated – are recorded as other changes in volume.
581. In the monetary asset account, rows 83-96 of the Year 2 worksheet in the Workbook: fish resources, shown in Table 5‑20, revaluation is obtained as a residual to reconcile opening and closing stocks. To obtain the monetary asset account for all fish resources (not included in the accompanying workbook), all elements of the monetary asset accounts for the individual species need to be added (opening and closing stocks, regeneration, depletion, revaluation). Due to the absence of a physical asset account, it is not possible to measure catastrophic losses, reclassifications or reappraisals in the standard method (default approach); but they are included in Table 5‑20 for completeness.
Note: In case the fish resource is regenerating (as evidenced by a longer asset life and asset value) it should be recorded as additions to stock (regeneration) in the monetary asset account. However, in the production and capital account it would be recorded as negative depletion.
Source: Workbook: fish resources, Year 2 worksheet.
582. If the asset life remains equal (indicating sustainable management), no depletion or regeneration cost should be recorded. If the asset life is increasing, a value for regeneration should be recorded in the monetary asset account, and this is calculated in the same way as the cost of depletion. Regeneration should only be recorded in case there is a clear indication, for instance as substantiated in a fishery management plan, that the higher future yields are expected to be harvested. It should be noted that although regeneration may be recorded in the monetary asset account, in the production and generation of income account it would be recorded as negative depletion (see Stage 4: Integration ).47
Stage 4 (fish resources): Integration
583. The information from the monetary asset account for fish resources will be used in the sequence of economic accounts (standard SNA presentation) (see Table 5‑21).
584. In the 2025 SNA, depletion of fish resources is recorded as a cost of production, similar to depreciation (instead of other changes in the volume of assets and liabilities as it was in the 2008 SNA). This will be recorded in the production account, in the earned income, the transfer of income account, and the capital account. Depletion may also be caused by resident operators outside national waters and vice versa, this is discussed in Section 5.3.3.
585. While they would not be calculated as part of the standard approach, reclassifications (upward or downward) and catastrophic losses are recorded as other changes in volume. Likewise, reappraisals (upward and downward) are treated as other changes in volume. The direct estimate for revaluation is to be recorded in the revaluation account. Finally, opening and closing stocks are part of the national accounts balance sheets (opening and closing balance sheet). In case of legal fishing in national waters by non-resident units, rent payments may take place which will be recorded as property income from the rest of the world in the allocation of earned income account.
Note: * if split asset: part of the regeneration (recorded as negative depletion) allocated to the legal owner; ** if split asset: part of the depletion allocated to the legal owner.
Source: Workbook: fish resources, Year 2 worksheet.
5.3.3. Specific topics
Costs of fishery management
586. In some countries, government makes (significant) cost to manage the fishery. It is not recommended to include the cost of fishery management as costs in resource rent calculation. This is also not standard practice when valuing other natural resources such as subsoil assets.
Vertical integration
587. In many circumstances, fishing operations are highly intertwined with the processing of fish, which is called vertical integration. For instance, fish is already processed on vessels, or by the same company on shore. While it is preferred to separately identify processing activities and only record resource rents generated by the fish before processing, it is recognised that this will prove difficult in practice. The distortion this may cause will in many cases be negligible.
Treatment of overseas territories
588. Some countries may have overseas territories with fish resources. The recommendation here is to fully align scope of measurement with the economic territory which underpins national accounts compilation, and is defined as: 2025 SNA (§5.14): “The economic territory includes the land area, airspace, territorial waters, including jurisdiction over fishing rights and rights to fuels or minerals. In a maritime territory, the economic territory includes islands that belong to the territory.” For users it may be useful to disaggregate the values of fish resources between areas for which it is recommended to align with the Standard country or area codes for statistical use (M49).48
Resource rent for different types of activities.
589. As mentioned, there are very different types of fishing activity (commercial vs. artisanal) which may result in very different resource rents. It is therefore recommended to separately identify the resource rent inherent in these activities to the extent possible. The output of fishing activities undertaken for own final consumption (e.g. subsistence fishing) would be included in production, however would not lead to the recognition of an asset. Therefore, also no depletion would be recorded in these instances, which would be consistent with the observation that oftentimes such activities can be considered sustainable.
Depletion caused by non-resident operators
590. During the development of the guide, the issue emerged how to treat depletion caused by non-resident operators (both inward i.e. by non-resident operators (from country A) in the economic territory of the compiling economy (say country B) and outward i.e. by resident operators (from B) abroad. This is a highly complex issue which was not explicitly discussed during the SNA update process. The 2025 SNA states as follows:
While in principle depletion would be recorded against the production of the non-resident unit, there is currently no agreed treatment for the recording of these flows in the integrated framework of national accounts or balance of payments. Thus, an exception is made such that no depletion is recorded in the accounts of the non-resident extractor. Where the fishing is managed, for example under quota arrangements, then following the treatments outlined above, the manager of the resource, commonly the government, may receive payments of rent and consequently have a share of the value of the fish resources on its balance sheet. An associated entry for depletion should also be recorded as appropriate in the other changes in volume of assets and liabilities account. (2025 SNA, §27.46)
Therefore, in these situations, no depletion should be recorded in the current accounts; depletion will only be recorded as in the 2008 SNA as an entry in the other changes in the volume of assets account (K21). The issue is placed on the post 2025 SNA/BPM research agenda.
591. However, countries are encouraged to further test and experiment with measurement in these types of situations. A possible solution that emerged from discussions in the EGNC would be the following:
All production is recorded by country A. This appears to be in line with current national accounting practices to include all fishing activity regardless in which economic territory it occurs.
All depletion is recorded by country A in its production and generation of income account.
All the asset value is recorded by country B which receives through the allocation of earned income account all the depletion from country A (in addition to rent payments). It is important to note that the rent payment need not be equal to the depletion.
Country B therefore ends up with 100% of the depletion in its capital account.
592. This recording however introduces a discrepancy with the Balance of Payments due to the transfer of depletion costs from the rest of the world. There are also several practical measurement challenges, such as the estimation of depletion costs to stocks outside the national territories. An alternative recording solution would be to introduce notional units which would be resident units in country B owned by country A.
593. Regarding the treatment of illegal fishing, the 2025 SNA specifies the following:
It is not realistic to consider that permission would be given to exhaust fish stocks, but illegal and unregulated fishing may either reduce the stock below the point of sustainability or exhaust them altogether. In these cases, and providing the activity is of a sufficiently large size and has an ongoing nature, entries to recognize additional economic asset value can be recorded. Specifically, entries will be required to show the economic appearance of the additional value of fish resources (generally in the accounts of the government) and to show the uncompensated seizure of fish resources by the extractor. Any depletion of the fish resources attributable to the fishing activity should be recorded against the extractor. Where the illegal or unregulated fishing is small in scale no changes in stock are recorded. (§27.45).
In case fishing activity by non-resident operators occurs illegally (and on a commercial basis), the asset would first be recognised as an appearance of an asset (K1) in country B, followed by uncompensated seizure (K4) by country A, after which recording of depletion in the other changes in volume of assets and liabilities account of country A would take place.
5.3.4. Modifications to the standard approach
594. The approach described in Section 5.3 is to be understood as the Tier 2 (default) method. As countries differ in their data availability and resources for conducting valuation of natural resource, this section describes also a Tier 1 (basic) approach that would typically be followed in case of limited data availability and/or resources, as well as Tier 3 (advanced) methods requiring high data availability and resources.
Basic approach
595. For the basic method it is assumed that no physical data exists about catch or landings. Therefore, instead of averaging unit resource rents, the best thing we can do is to average resource rents (that is we skip Steps 3 and 5 of Stage 3). Moreover, it may not be possible to determine separate resource rents for species groups.
596. As a result, it is recommended in the basic approach to estimate a weighted asset life based on output shares of the various species groups (see Table 5‑22). The development of the weighted asset life can be used to estimate the cost of depletion (or regeneration in case the weighted asset life increases), as in Table 5‑19, with revaluation obtained as a residual.
Source: Workbook: fish resources, Stage 2 Physical data worksheet.
597. In case individual species are not managed, it can be assumed that the asset value is 0.
598. If few national data are available to allow estimation of fish resources, the global dataset compiled as part of the World Bank’s Changing Wealth of Nations program (World Bank, 2024[11]) may provide a good starting point. CWON estimates wealth for a large portfolio of countries (> 150 in the latest edition), in a high level of disaggregation of resources including also fish resources, covering a time series of 1995-2020.49 The CWON methodology uses a range of mostly global data sources for the estimates.
Advanced methods
599. In an ideal situation, one would have detailed information about each of the main fisheries (i.e. spatially explicit) that would allow to compile a physical asset account of each species (opening and closing stocks, growth, catch, age groups etc.). Sometimes, such information is readily available from specialised research agencies or universities. One could measure depletion by comparing the natural growth with the gross catch (multiplied with the asset price in use) i.e. the default approach to measuring depletion. In case of significant by-catch, it would be generally recommended to assess the gross catch instead of landings.
600. In case more detailed information was available about different age cohorts within specific fisheries, it would be possible to set-up biophysical models as mentioned in Section 3.5.1 for the main fish species. These models have two key advantages. First, they would allow to make dynamic projections of future stocks based on current catch levels. Second, they would allow to estimate the sustainable yield (and maximum sustainable yield) of fisheries. As a result, more advanced measures of depletion could be undertaken based for instance on the reduction in sustainable yield of current fishing efforts. Hereto, also more specific information about the type of catch (e.g. by size or age of different species) would be relevant. As a result, it would also be possible to assess for instance, the effect of switching to different fishing techniques that reduce by-catch of immature fish.
601. Biophysical models may also be established that go beyond individual fish stocks and look at the interaction between different fish species (e.g. predator-prey relationships) (Yun et al., 2017[19]). This would bring us in the realm of SEEA Ecosystem Accounting.
The UK’s Natural Capital Accounts included estimates for fisheries value since their first publication. This was a challenge since the intent was to value fisheries in the UK Exclusive Economic Zone (EEZ) but UK vessels capture fish from outside of this area. Equally fish from the UK EEZ are captured by foreign vessels meaning that the UK fishing industry does not provide an accurate representation of UK fisheries and this is likely the case for all nations.
In response we initially developed a method linking data from: fishery capture data from vessel logbooks, EEZ mapping and an economic survey of fishing vessels. That work produced a net annual value of fish landed to the fishermen but little about the fish that remained in the sea. We then mapped species catches to estimates of sustainability and used a basic heuristic to estimate the asset value.
STEP 1: Estimate total UK EEZ fishery catch
The EU Commission's Joint Research Centre (JRC) Scientific, Technical and Economic Committee for Fisheries (STECF) as part of the Fisheries Dependent Information (FDI) data call (deep sea) publish annual data on fish captures by species aggregated from logbooks. These are spatially referenced to International Council for the Exploration of the Sea (ICES) rectangles which do not neatly align to the UK EEZ (Figure 5-10). We supplement this with data from the UK’s Marine Management Organisation (MMO) who gather the initial data from the UK fleet.
The MMO produced a GIS analysis weighing ICES rectangles by the percentage of them lying within the UK EEZ. We then assumed that the fish caught within a rectangle would be caught evenly across that area. Those percentages provided weightings for catch data to provide a near total estimate of catch by species in UK EEZ waters. We do not distinguish between UK and foreign vessels. This figure goes into the physical flow account.
STEP 2: Net income per tonne landed
Seafish is a public body that supports the UK seafood industry. They produce an annual economic survey of the UK fishing fleet. They gather data on costs by vessel type and can link that to species caught and price of landings with the use of MMO data on landings by stocks (landed value and landed weight) and landings by stocks and species (in cases where species are not managed by total allowable catches). Seafish produce, from those data, estimates of net profit per tonne of fish landed. We make the assumption that foreign vessels have the same costs and income.
STEP 3: Aggregate Fish Profit
We then match the data using the species name and FAO area50 caught in between total catch estimated in step 1 with species profits per tonne. We are able to match profit data for approximately 85% of the fish capture tonnage. Once that is done we can multiply the total catch by profit per tonne to produce an annual value. Fish capture data is in landed weight which could mean whole, or gutted but profit data are in live weight leading to a further discrepancy. Using MMO data on live and landed weights of UK vessel landings into the UK showed aggregate landed weight is around 7% less than live weight.
STEP 4: Match to Sustainability Indices
ICES stock assessments produce estimates of whether acceptable mortality range is at or below levels capable of producing maximum sustainable yield; and if each stock's spawning biomass is at or above the level capable of producing the maximum sustainable yield. We rate a stock as sustainable if it meets both requirements. We can spatially match these estimates to catch areas and species. This approach provided stock sustainability estimates for 72% of the fish capture tonnage when we first developed the approach.
STEP 5: Estimate fisheries asset value
Asset values within the UK Natural Capital accounts are usually estimated as the net present value (NPV) of the discounted stream of income into the future. The UK Natural Capital Accounts have a set of principles which underpin assumptions including that NPV is estimated over 25 years for non-renewable resources and 100 years for renewable resources when there is no alternative. In the absence of detailed fishery models, enabling us to make estimates of the period of time over which an unsustainable fishery would be lost, we consider an unsustainable stock to be a non-renewable asset. We therefore restrict its asset lifetime to 25 years while sustainable fisheries are valued over 100 years.
NEXT STEPS: Depletion
This Methodology represents the current state of the production of fish natural capital estimates for the UK. The UK does not yet produce estimates of depletion. To do so there are some options:
Develop full bio-economic models of all fisheries and calculate the annual marginal loss from long term production of the population.
Use the change in asset value from species becoming sustainable and unsustainable appropriately.
Option 1 is highly challenging as has been outlined in Section 5.3.4. It would likely to be costly to develop initially and to involve significant ongoing costs to produce. The outcome would however very accurately reflect annual depletion or restoration of fisheries.
Option 2 is initially straightforward. Where a species shifts from sustainable to unsustainable or vice versa the asset value declines in accordance with UK Natural Capital Principles. If a fishery becomes unsustainable, we can estimate the net present value of that fishery if it had remained sustainable and subtract the value it now holds over just 25 years. That difference represents how our crude method estimates the expected loss in asset value assuming the fishery continues to be fished unsustainably.
The simplest thing to do would be to net off that full cost in a single year. However, this does not really represent the impact of a single year of fishing. Some way of apportioning the expected long-term loss across each year the fishery continues to be unsustainable would be more reflective of the impact in that year. For instance, since our approach implies that the population would be fished out over a 25-year period you could divide the total loss by 25, as recommended in the chapter.
If we took this approach to shifting to an unsustainable fishery however it is not clear how we would reflect the process in reverse. Using our current approach the fishery appears to become sustainable in a single year. In truth much of the recovery is likely to have happened while the fishery was classed as unsustainable. To overcome this, we would need to consider ways to differentiate unsustainable fisheries in recovery and unsustainable fisheries in decline. In that way we could use our apportioned values symmetrically.
602. In this section we will discuss briefly the valuation of biological resources other than timber or aquatic resources. We will first discuss biological resources yielding repeat products (AN331), followed by biological resources yielding once-only products (AN332) other than fish resources, and then work-in-progress on cultivated biological resources (AN333).
5.4.1. Cultivated biological resources yielding repeat products
Animal resources yielding repeat products (AN3311)
603. Mature animals yielding repeat products consist of a diverse group including: farm animals such as cows, sheep and goats kept for milk, eggs, or wool; animals such as bulls kept for generating power; horses used for transportation, and finally animals used for entertainment such as circus animals or animals kept in zoos.
604. They are treated as fixed assets and usually valued based on a PIM. UNECE (2024[20]) (see Table 5‑23) provides recommendations for a range of the service life, including an average service life of ten years that can be used as default. The using up of animal resources yielding repeat products in production processes is recorded as depreciation, not as depletion.51 Immature animal resources yielding repeat products are recorded as Work-in-progress (AN3331).
Tree, crop and plant resources (AN3312)
605. The 2025 SNA distinguishes between “single-use plants, trees and livestock that produce an output once only (when the plants or trees are cut down or uprooted or the livestock slaughtered) from the relevant work-in-progress related to trees (including vines and shrubs) and livestock that are used in production repeatedly or continuously for more than one year to produce outputs such as fruit, nuts, rubber, milk, wool, power, transportation and entertainment” (§11.223).
606. Mature tree, crop and plant resources yielding repeat products are treated as fixed assets. They are usually valued based on a PIM. UNECE (2024[20]) (see Table 5‑23) provides recommendations for a range of the service life, including an average service life of 15 years that can be used as default.
607. The using up of tree, crop and plant resources in production processes is recorded as depreciation, not as depletion. Investment is recorded as GFCF. Immature tree, crop and plant resources yielding repeat products are recorded as work-in-progress (AN3331).
5.4.2. Biological resources yielding once only products (other than fish resources)
608. Biological resources yielding once-only products consist of AN3321 cultivated biological resources yielding once-only products and AN3322 non-cultivated biological resources yielding once-only products. AN3321 cultivated biological resources yielding once-only products is in principle an empty category which is only included for completeness of the classification structure. The class is empty because timber resources are always recorded as AN333 work-in-progress, while forest land is always recorded under AN31 land. The main example of non-cultivated biological resources yielding once-only products consists of fish resources (see Section 5.3 for a detailed discussion of definition and scope), and wild animals (e.g. game) hunted not for own final consumption.
Wild animals (AN3322)
609. 2025 SNA (§11.206-207) clarifies that wild animals are in principle outside the asset boundary, except when the species is controlled (e.g. through hunting rights) or owned.
The growth of animals, birds, fish, etc., living in the wild, or growth of uncultivated vegetation in forests, is not an economic process of production so that the resulting assets cannot be classed as produced assets. Nevertheless, when these uncultivated biological resources forests or the animals, birds, fish, etc. are actually owned by institutional units and are a source of benefit to their owners, they constitute economic assets. When wild animals, birds, fish, etc. live in locations such that no institutional unit is able to exercise effective ownership rights over them they fall outside the asset boundary. (2025 SNA, §11.206)
610. Wild animal resources that fall within the asset boundary can be valued based on market transactions (e.g. prices for killed animals) in combination with information about the population of different species. In the absence of market transaction, the asset value can be based on NPV of future resource rents (for instance by looking at ISIC 017 - Hunting, trapping and related service activities). Their accounting treatment is similar to that of fish resources: they are non-cultivated assets; their regeneration is recorded as negative depletion while their run-down (e.g. due to overhunting) is recorded as depletion.
Non-timber forest resources (AN3322)
611. Gathering of non-timber forest resources such as berries and wild berries constitutes production (2025 SNA, §1.68). Only in case gathering of non-timber forest resources is done on a commercial scale it would give rise to a separate asset. This is the reason why such output is not included in calculating resource rent when valuing forest land based on the net present value. For the valuation of output, (equivalent) market prices may be used.
5.4.3. Work-in-progress on cultivated biological resources (other than timber)
612. This category covers both AN3331 work-in-progress on biological resources yielding repeat products such as breeding of racehorses or growing of fruit trees, as well as AN3332 work-in-progress on biological resources yielding once-only products such as trees grown for timber. We will discuss here several examples of the latter category, other than timber, due to their importance.
Aquaculture (AN3332)
613. The SNA does not define or discuss aquaculture specifically. The only reference the 2025 SNA (§11.85) makes to aquaculture is that “the infrastructure necessary for aquaculture such as fish farm and shellfish beds” is part of other structures. The SEEA CF follows the FAO definition: “Aquaculture is the farming of aquatic organisms, including fish, molluscs, crustaceans and aquatic plants. Farming implies some form of intervention in the rearing process to enhance production, such as regular stocking, feeding, protection from predators, etc. Farming also implies individual or corporate ownership of the stock being cultivated.”52 The SEEA CF (§5.410) is clear that all aquatic resources that are a result of aquaculture are to be considered as cultivated biological assets.
614. For the purpose of national accounts compilation, cultivated aquatic resources are treated as work-in-progress, with the exception of breeding stocks which are treated as fixed assets.53 By convention, no underlying asset is to be recorded for aquaculture. This implies that they are treated as inventories, and these assets are not subject to depreciation or depletion. Valuation of aquatic resources can be based on market transactions, using a PIM, but could also be undertaken based on NPV of resource rents. A recent example of the valuation of aquaculture using the residual value method is from Norway (Greaker and Lindholt, 2021[21]).
Animals for slaughter (excluding aquaculture) and agricultural crops (AN3332)
615. Animals for slaughter consist of domestic livestock such as chickens, ducks, cows, pigs, sheep, turkeys, that are raised for food production. CPC 2.1 distinguishes in Group 21 live animals between: bovine animals; other ruminants; horses and other equines; swine/pigs; poultry; and, other. Agricultural crops are described in CPC 2.1 in Division 01 Products of agriculture, horticulture and market gardening as consisting of: cereals; vegetables; fruits and nuts; oilseeds and oleaginous fruits; edible roots and tubers; stimulant, spice and aromatic crops; pulses (dried leguminous vegetables); sugar crops; and, other.54
616. Their generation (growth) is recorded as additions to inventories, while their rundown is recorded as withdrawals from inventories. Valuation is usually based on market transactions in combination with agricultural (livestock) statistics: “Regarding livestock raised for slaughter and agricultural crops, the asset only consists of work-in-progress, and can usually be valued by reference to the prices of such products on markets.” (2025 SNA, §14.61).
617. The 2025 SNA specifies that “the output of agriculture, forestry, and fishing is complicated by the fact that the process of production may extend over many months, or even years. For many crops the growing season will span three quarters of the year, with the harvest taking place in the third quarter, and preparation of the fields taking place in the last quarter of the preceding year.” (2025 SNA, §18.212) Recording of work-in-progress for agricultural crops will therefore be especially relevant when compiling quarterly accounts.
Summary of key recommendations Chapter 5
Timber resources and forest land (Section 5.2)
Due to the resource intensive nature of the valuation of timber resources and forest land, it is proposed to apply a materiality threshold in the form of a long-term average contribution of Forestry and logging to GDP of at least 0.1%. Furthermore, it is proposed that in the standard approach, timber resources on other wooded land may be omitted.
It is important to distinguish between timber resources (work-in-progress) recorded under AN333 and forest land (the underlying asset) recorded under AN31 together forming a composite asset.
For estimating the volume of timber resources, it is recommended to first compile a physical account for areas of forest land (expressed in hectares). The physical account for forest land should be disaggregated by (main) species, as different species may have different timber density, growth and mortality rates, etc.
For valuing timber resources (work-in-progress), the default approach is to use the stumpage price in combination with stocks of standing timber (in physical units).
When estimating a stumpage price, it is recommended to take an average price of all timber eventually sold (i.e. a weighted average across different wood types and wood uses).
For the valuation of the underlying asset, the preferred valuation method is to use market transactions. In case this is not feasible, it is recommended to apply the Net Present Value of future resource rents. In either method, the value of forest land (the underlying asset) is then calculated as a residual by deducting work-in-progress.
Output (to be included in GDP) consists of the growth of timber minus natural losses (i.e. net annual increment) that is expected to be harvested. To estimate the percentage of the net annual increment that will be harvested in the future, it is recommended to use land-use planning information and/or information about licenses provided to forestry companies. In the absence of such detailed (spatially explicit) information, a coefficient may be applied based on an analysis of historical records of net annual increment and removals.
To calculate the resource rent for timber production, the RVM should be applied. It is recommended to apply a top-down approach starting from national accounts aggregates for ISIC Division 02: Forestry and logging. As we are valuing timber resources and forest land for the provision of timber, it is important to restrict the scope of ISIC Division 02 to commercial timber harvesting and logging activities, hence excluding ISIC 023 Gathering of non-wood forest products.
It should be assumed that the projected net annual increment remains constant for the remainder of the asset life of the resource. It is recommended to apply as default an asset life of 100 years.
It is recommended to assume that unit resource rents remain constant in the future unless specific policies have been implemented which would allow to estimate a specific path of future unit resource rents.
It is possible to arrive at a negative asset value for the underlying asset (forest land), in case the value of work-in-progress is larger than the value of composite asset. This is an indication that the work-in-progress is overvalued. To be consistent with the valuation of other natural resources, it is recommended to limit the value of the composite asset to the net present value of resource rents (or the market value of land in case market prices are used) and reassess the value of work-in-progress.
Overharvesting has two effects: a net withdrawal from work-in-progress and a reduction in the value of the underlying asset in case future growth of timber is reduced, which is recorded as depletion. Likewise, regeneration may occur in case of underharvesting, recorded as negative depletion. Due to natural variability, it is recommended to apply a bandwidth approach (e.g. if the ratio of removals (harvest) to net increments is within a 95-105% range, one may just assume a sustainable use).
The following is to be applied in case of illegal logging:
In case of regular illegal extraction at commercial scale:
In case the asset is already recorded in the SNA balance sheet, this is recorded as an uncompensated seizure of the asset (forest land and work-in-progress).
If the asset has not (yet) been recorded in SNA balance sheet, then such illegal activity would necessitate the creation of the relevant assets in the legal owner’s accounts, which would then be shown as seized by the illegal extractor (e.g. in case of logging in protected forest).
In case of irregular illegal extraction at small scale:
If the asset is recorded in the SNA balance sheet, then this would be recorded as a loss of inventory.
If the asset is not recorded in the SNA balance sheet, illegal extraction would simply be ignored (as it does not concern a transaction (because it is illegal) and there is no inventory to record a loss against), but if it is informal extraction (e.g. household gathering of firewood), it would be recorded as own account production).
A Tier 1 method consists in looking at the value of harvests as proxy for the accrual recording of output. This may be reasonable if no deforestation is taking place and there are a significant number of forestry companies in the country. In case deforestation takes place, the asset life should be estimated based on the average deforestation rate compared with the total forest stock. Depletion could be estimated by dividing the asset value by the expected asset life.
There are several Tier 3 methods such as applying a hedonic pricing method using observed land transactions or applying the consumption value method rather than the stumpage value method for valuing timber resources. An alternative way of implementing the consumption value method is to apply the so-called capitalisation of costs method which lessens the data requirements.
Fish resources (Section 5.3)
Non-cultivated biological resources yielding once only products (AN3322) include fish resources. Due to the resource-intensive nature of the valuation of fish resources, it is proposed to apply a materiality threshold, focusing on the valuation of assets that contribute more than 5% of output in ISIC 031 (Fishing), and for which the long-term average contribution of fishing to GDP is at least 0.1%. When a reasonable estimate can be made of how much of the asset value is missed, it is recommended to gross up the asset value. It is recommended to use 12 major groups as a checklist to assess which fish resources are available in the country and would be above the threshold in terms of output.
The assets to be included in the national accounts (SNA) balance sheet consist of resources that are subject to a quota regime or are commercially exploited within the national Exclusive Economic Zone (EEZ); transboundary stocks (shared with neighbouring country(ies)) and/or straddling stocks (in the high seas) may also be included (in part) if they satisfy the same conditions.
Regarding gross catch/harvest (output), this will include all fish caught by resident operators regardless of location (in national EEZ, other EEZ or the high seas).
For valuing fish resources, under some circumstances the value of quota sales can be used to value the fish resource. Necessary conditions are that the right was required during an open competition or when it is transferable i.e. it may be sold to other economic agents. When this approach is not feasible, it is recommended to apply the Net Present Value method of future resource rents.
While it would be advantageous to compile a full physical asset account for fish resources, it is recognised that this may not be possible for many countries due to data constraints, so this is considered an advanced method. For valuing the natural resource and its depletion or regeneration a more basic method is recommended which estimates depletion as the asset value divided by the asset life.
The asset life of the resource will depend on how the fish stocks are managed:
The preferred option for estimating the asset life would be to use stock assessments for all the species identified within the previous stage. The second-best option would be to collect catch-per-unit effort data. The third option would be to use time series information about catch (landings) to deduce sustainability. The final option would be to rely on other indicators of the condition of the fishery or fish stock.
If it is not possible to estimate the asset life of each fish species, but if it is known that the species is in scope of the asset boundary and is sustainably managed, a default asset life of 25 years is recommended.
For measuring resource rent, it is recommended to apply a top-down approach starting from national accounts aggregates of ISIC group 031 - Fishing.
It is recommended to assume that the unit resource rent will remain constant in the projection period unless specific policies have been implemented which would allow us to estimate a specific path of future unit resource rents.
The number of years used for smoothing of unit resource rent will depend on the type of resource, but typically would range from three to ten years.
It is not recommended to include costs of fishery management in the resource rent calculation.
Some countries may have overseas territories with fish resources. The recommendation here is to fully align the scope of measurement with the economic territory which underpins the national accounts compilation.
There are very different types of fishing activity (commercial vs. artisanal) which may result in very different resource rents. It is therefore recommended to separately identify the resource rent inherent in these activities to the extent possible.
The output of fishing activities undertaken for own final consumption (e.g. subsistence fishing) would be included in production, however, would not lead to the recognition of an asset. Therefore, also no depletion would be recorded in these instances.
A Tier 1 method is required when no physical data exists about catch, in which case a weighted asset life based on output shares of the various species groups can be used. In case more detailed information was available about different age cohorts within specific fisheries, it would be possible to set-up biophysical models which would be considered a Tier 3 approach. Biophysical models may also be established that go beyond individual fish stocks and look at the interaction between different fish species (e.g. predator-prey relationships).
References
[9] Alberdi, I. et al. (2020), “Assessing forest availability for wood supply in Europe”, Forest Policy and Economics, Vol. 111, p. 102032, https://doi.org/10.1016/j.forpol.2019.102032.
[8] Alberdi, I. et al. (2016), “Towards harmonized assessment of European forest availability for wood supply in Europe”, Forest Policy and Economics, Vol. 70, pp. 20-29, https://doi.org/10.1016/j.forpol.2016.05.014.
[7] EC (2022), “ANNEX to the Proposal for a Regulation of the European Parliament and of the Council”, amending Regulation (EU) No 691/2011 as regards introducing new environmental economic accounts modules (COM(2022) 329 final), Brussels (11.7.2022).
[12] European Commission (2013), European System of Accounts (ESA), https://doi.org/10.2785/16644.
[1] Eurostat (2024), “European Forest Accounts Handbook”, https://ec.europa.eu/eurostat/documents/3859598/19764075/KS-GQ-24-015-EN-N.pdf/b70bb6bc-57eb-8074-dad7-edab3144482e?version=2.0&t=1733398613839.
[22] Eurostat (2002), Natural Resource Accounts for Forests, Office for Official Publications of the European Communities, Luxembourg, https://ec.europa.eu/eurostat/documents/3217494/5633257/KS-47-02-430-EN.PDF/145140dc-6a1d-4078-9db1-790a4701868f.
[5] Eurostat (2002), The European Framework for Integrated Environmental and Economic Accounting for Forests — IEEAF, Office for Official Publications of the European Communities, Luxembourg, https://ec.europa.eu/eurostat/documents/3859598/5859865/KS-BE-02-003-FR.PDF.pdf/a64006fa-3217-4d74-a72b-a0393f18b5e0?t=1414780455000.
[13] FAO (2024), The State of World Fisheries and Aquaculture 2024, FAO, https://doi.org/10.4060/cd0683en.
[10] FAO (2020), Global Forest Resources Assessment 2020: Main report., https://doi.org/10.4060/ca9825en.
[4] FAO and UNSD (2020), System of Environmental-Economic Accounting for Agriculture, Forestry and Fisheries (SEEA AFF), FAO and United Nations Statistical Division, https://doi.org/10.4060/ca7735en.
[21] Greaker, M. and L. Lindholt (2021), The resource rent in Norwegian aquaculture, Statistics Norway, https://www.ssb.no/nasjonalregnskap-og-konjunkturer/nasjonalregnskap/artikler/the-resource-rent-in-norwegian-aquaculture-1984-2020/_/attachment/inline/5167d8e4-9b32-45cd-96c3-a87fa8b4a93b:216a5eb370db4426a5c7b18e612b523dc5c2c4eb/DP962_web.pdf.
[15] Ovando, D. et al. (2021), “A history and evaluation of catch‐only stock assessment models”, Fish and Fisheries, Vol. 23/3, pp. 616-630, https://doi.org/10.1111/faf.12637.
[16] Paolo, F. et al. (2024), “Satellite mapping reveals extensive industrial activity at sea”, Nature, Vol. 625/7993, pp. 85-91, https://doi.org/10.1038/s41586-023-06825-8.
[20] UNECE (2024), “Final report, Item 3 of the provisional agenda Improvement of measures of consumption of fixed capital ECE/CES/GE.20/2024/6”, in Directors of Macroeconomic Statistics Task Force on fixed assets and estimation of consumption of fixed capital under European System of Accounts 2010, presented at the Conference of European Statisticians / Group of Experts on Statisticians / Group of Experts on National Accounts, Twenty-third session Geneva, 23-25 April 2024.
[18] UNEP (2023), Inclusive Wealth Report 2023: Measuring Sustainability and Equity, https://wedocs.unep.org/20.500.11822/43131.
[6] United Nations et al. (2014), System of Environmental-Economic Accounting 2012 — Central Framework, United Nations, https://seea.un.org/sites/seea.un.org/files/seea_cf_final_en.pdf.
[3] UNSD (2006), Handbook of national accounting: Integrated environmental and economic accounting for fisheries, United Nations, New York, https://www.fao.org/fishery/docs/DOCUMENT/UNhandbook/UNhandbook.pdf.
[11] World Bank (2024), The Changing Wealth of Nations. Revisiting the Measurement of Comprehensive Wealth, International Bank for Reconstruction and Development / The World Bank, https://www.worldbank.org/en/publication/the-changing-wealth-of-nations.
[14] World Bank (2021), A Practical Approach for Estimating Marine Fisheries Asset Value., World Bank, https://documents1.worldbank.org/curated/en/099350006152239793/pdf/P1772780b3c6140a10b495065961f4328e5.pdf.
[17] World Bank (2021), The Changing Wealth of Nations. Managing assets for the future, International Bank for Reconstruction and Development / The World Bank, https://www.worldbank.org/en/publication/changing-wealth-of-nations.
[2] World Bank (2017), Forest Accounting Sourcebook. Policy applications and basic compilation, World Bank, Washington, DC., https://documents1.worldbank.org/curated/en/772391580132234164/pdf/Forest-Accounting-Sourcebook-Policy-Applications-and-Basic-Compilation.pdf.
[19] Yun, S. et al. (2017), “Ecosystem-based management and the wealth of ecosystems”, Proceedings of the National Academy of Sciences, Vol. 114/25, pp. 6539-6544, https://doi.org/10.1073/pnas.1617666114.
← 1. It should be noted that at the time of finalising the guide, some of the codes associated with the classification hierarchies of the 2025 SNA were still under review and may undergo change. Users are advised to consult the final published version of the SNA when it becomes available.
← 2. Within the EU area, existing forest statistics are already pretty comprehensive. For instance the Eurostat dataset: Volume of timber over bark (source: EFA questionnaire) [for_vol_efa__custom_8898628] (https://ec.europa.eu/eurostat/databrowser/view/for_vol_efa/default/table?lang=en contains estimates of the net annual increment in physical and monetary terms, as well as volume of timber over bark and wooded / forest land in physical and monetary units (although not for all EU countries).
← 3. The EFA replaces the European Framework for Integrated Environmental and Economic Accounting for Forests (IEEAF) (Eurostat, 2002[22]; [5]) and is consistent with the 2010 ESA.
← 4. The SEEA-Fisheries was available at the UNSD website as white cover version prior to official editing but seems never to have been officially released; it is no longer available online.
← 5. “As with the treatment of buildings and structures, the value of these environmental assets should, in principle, be separated from the land on which they are grown. For example, for forest land, the separation should be based on the value of the stock of timber resources” (SEEA CF, §5.307) (United Nations et al., 2014[6])
← 6. Which itself is consistent with FAO’s Forest Resources Assessment.
← 7. These thresholds were suggested by the EGNC as a reasonable compromise.
← 8. In the 2008 SNA (§10.140), work-in-progress for timber production was defined in the following manner: “Work-in-progress on cultivated biological resources consists of output that is not yet sufficiently mature to be in a state in which it is normally supplied to other institutional units.” In the 2025 SNA, the maturity of the trees is no longer part of the definition, which is: “Work-in-progress related to cultivated biological resources yielding once-only products represents the accrual accounting of the growth of trees intended for the future production of timber.” (2025 SNA, §11.225)
← 10. To see why it is necessary to also deduct the user costs of fixed capital consider the situation where the silviculture company hires a logging company to harvest the trees and bring them to the road. The logging company would also want to include depreciation and opportunity cost for its equipment in the cost its charges for its services.
← 11. The original stumpage value method assumes that the natural growth rate of timber stocks is equal to the discount rate and therefore that the current inventory can be used as proxy for the combined asset value (of standing timber and the underlying asset) (IEEAF (Eurostat, 2002, p. 102[5])). In this compilation guide, we take a different approach where we value the timber resources (work-in-progress) and forest land (the underlying asset) separately.
← 12. To see why this is the case, an analogy may help. Let’s consider runners of a 10 km course. The stumpage value method assumes that all runners keep the same speed throughout the race. In the consumption value method, runners start slowly and run faster every kilometre. They finish however at the same time as the stumpage runners. If you ask at each point in time “what is the speed?”, you get a different answer (and hence different additions to work-in-progress i.e. output) depending on whether we look at a stumpage runner or a consumption runner. However, if we organize multiple 10km races simultaneously of consumption runners (i.e. they run faster each kilometre) that start at different points in time (i.e. they overlap), and now ask the question “what is the average speed?”, we would approximate the average speed of the stumpage runners (as we average across runners that are early in the race and hence have a low speed with runners that are near the end of the race and have a high speed). However, in terms of (average) distance, the consumption runners are always behind the stumpage runners as each of them follows the orange line instead of the blue line (and hence the asset value of timber resources based on consumption value will be lower).
← 13. It should be noted that other valuation methods also exist. For instance, in Germany the Faustmann formula is applied, and in Austria forest land is valued based on (part of) the value of grassland (which can be considered an opportunity cost approach). The Faustmann method (see Eurostat 2024c) is highly similar to the NPV of resource rent method: the main difference is that it departs from the assumption of unstocked land, and then projects income flows from the timing of future harvests and rotations.
← 14. Depletion may reduce the value of forest land but at the same time increase its option value for conversion.
← 15. The example assumes that one tree species is harvested per area. The example can be readily extended to more complex situations such as areas with multiple species.
← 16. “The objective of this dataset is to trace net changes in terms of volume in the growing stock of standing wood on forest land. It shows data underlying the indicator on the intensity of use of forest resources. This indicator relates actual fellings to annual productive capacity (i.e. gross increment). Forest depletion and growth describe balances or imbalances in different types of forests. The intensity of use of forest resources reflects various forest management methods and their sustainability. These data should be read in connection with other indicators of the OECD Core Set, in particular with indicators on land use changes and forest quality (species diversity, forest degradation), and be complemented with data on forest management practices and protection measures. In interpreting these data, it should be borne in mind that definitions and estimation methods vary among countries”, see: https://data-explorer.oecd.org/vis?fs[0]=Topic%2C1%7CEnvironment%20and%20climate%20change%23ENV%23%7CLand%20and%20forest%23ENV_FOR%23&pg=0&fc=Topic&bp=true&snb=3&vw=tb&df[ds]=dsDisseminateFinalDMZ&df[id]=DSD_FOREST%40DF_FOREST&df[ag]=OECD.ENV.EPI&df[vs]=1.0&dq=.A.INT_USE.&pd=2010%2C&to[TIME_PERIOD]=false.
← 17. Felling statistics may underestimate actual fellings and may need to be corrected by confronting with other data sources on demand/use of roundwood. For an example, see: https://www.thuenen.de/en/institutes/forestry/projects-1/recalculation-of-fellings.
← 18. Removals are defined as in EFA (§4.15) as “the volume of all trees, living or dead, that are felled and removed from the forest, other wooded land or other felling sites. It includes unsold roundwood stored at the forest roadside. It also includes natural losses that are recovered, removals during the year of wood felled in an earlier period, removals of non-stem wood (such as stumps and branches), and removal of trees killed or damaged by natural causes (known as natural losses), e.g. fire, wind, insects, and diseases. It does not include non-woody biomass or any wood that is left in the forest and not removed during the year, e.g. stumps, branches, tree tops and felling residues (harvesting waste) (Regulation (EU) 691/2011 Annex VII, based on the Joint Forest Sector Questionnaire T&D 2020).”
← 19. If the felled timber temporarily remains in the forest, it is recorded as inventories of finished products such as wood-in-the-rough or roundwood. The moment the wood is removed from the forest, this is recorded as a withdrawal from inventories of finished products (which is then used by for instance manufacturing).
← 20. Revaluations may also result from a change in the extraction path (due to the effect of discounting).
← 21. The output of ISIC 023 is likely to be small compared with the total output of ISIC 02 and typically would not include use of fixed assets. In case gathering of non-timber forest resources is done on a commercial scale (and hence likely not negligible) it would give rise to a separate asset (AN3322 non-cultivated biological resources yielding once-only products). In such instances, it is recommended to separately identify the output as well as the value of fixed assets involved in this activity.
← 22. Discussion in the EGNC indicated that some countries apply a 200 years asset life. However, in light of climate change (and an increasing incidence of forest fires,) shortening the asset life to 100 years was deemed appropriate.
← 23. It would be possible to make a different choice (e.g. that it falls at the end of the accounting period) as this is merely a convention. However, in order to standardise the approach, a decision had to be made and this was the recommendation of the EGNC (and is consistent with 2025 SNA (§18.117) which mentions that for flow variables the desired valuation point is usually the mid-point of the period.
← 24. Preferably a producer price index for the forestry industry.
← 25. The price being estimated is price in the ground (in situ) before any processing has taken place.
← 26. Although the 2025 SNA does mention agricultural land and forest land on several occasions.
← 27. The IPCC explains as follows: “Forest degradation is land degradation in forest remaining forest. In contrast, deforestation refers to the conversion of forest to non-forest that involves a loss of tree cover and a change in land use.”, based on https://www.ipcc.ch/site/assets/uploads/sites/4/2022/11/SRCCL_Chapter_4.pdf.
← 28. REDD+ stands for reducing emissions from deforestation and forest degradation. “Under the framework with these REDD+ activities, developing countries can receive results-based payments for emission reductions when they reduce deforestation.” Based on https://unfccc.int/topics/land-use/workstreams/redd/what-is-redd.
← 32. Looking at deforestation/afforestation provides however only a rough indication of the sustainability of timber harvesting practices, as a lot of timber harvesting occurs in forest land that will not immediately transition to a different land cover.
← 34. The exception for non-market producers is not relevant anymore under the 2025 SNA.
← 35. The stumpage price and production cost of mature trees may be available from forestry statistics or can be derived from the national accounts where the costs consist of intermediate consumption and wages, but costs should exclude logging costs as we are trying to estimate a stumpage price and cost; in case of using national accounts data, the costs are then normalised per m3 harvested.
← 36. 2025 SNA (§11.222): “Non-cultivated biological resources consist of animals, birds, fish and plants that yield both once-only and repeat products over which ownership rights, often collectively by government, are enforced but for which natural growth or regeneration is not under the direct control, responsibility and management of institutional units. In practice, these resources are restricted to migrating biological resources, such as fish in open seas, which are subject to some form of quota regime.”
← 37. A note on terminology: the EEZ and high seas are legal terms under the United Nations Convention on the Law of the Sea and describe mutually exclusive parts of maritime territories; the term open seas is oftentimes used informally to denote the high seas but may also refer to the EEZ. The 2025 SNA uses both terms.
← 38. “Diadromous fishes describe species that spend part of their lives in freshwater and part in saltwater. There are two categories of diadromous fishes, catadromous and anadromous. Catadromous fishes hatch or are born in marine habitats, but migrate to freshwater areas where they spend the majority of their lives growing and maturing. As adults they return to the sea to spawn. [...] The best-known group of catadromous fishes are the true eels. [...] Anadromous fishes are the opposite of catadromous fishes in that hatching and a juvenile period occur in freshwater. This is followed by migration to and maturation in the ocean. Adult fish then migrate back up rivers ... in order to reproduce in freshwater habitats. There are approximately 100 known species of anadromous fishes. Several of these are well-known and of great commercial value, including many species of salmon along with striped bass, steelhead trout, sturgeon, smelt, shad, and herring.” Based on: https://www.encyclopedia.com/science/news-wires-white-papers-and-books/catadromous-diadromous-and-anadromous-fishes.
← 39. Official correspondence tables between ISSCFC, ISSCAAP, HS: Harmonized System, and CPC: Central Product Classification can be found here: https://openknowledge.fao.org/server/api/core/bitstreams/3dc80464-f445-4960-9d48-4ac0c29f55c3/content
← 40. The ISCAAP list can be found here: https://www.fao.org/fishery/static/ASFIS/ISSCAAP.pdf.
← 41. The resource rents captured (by the non-resident operator) will likely be non-observable for the compiling country.
← 42. SEEA CF (§5.434) “Therefore, in the assessment of the change in the aquatic resources belonging to a country over an accounting period, it is not sufficient or accurate to focus only on the catch by operations of residents of that country. This estimate will exclude changes in the national aquatic resource due to catch by non-residents and will include catch by residents in other countries. For the purposes of accounting for the national aquatic resource, the focus must be on the total catch from the country’s aquatic resources, including any resources on the high seas over which ownership rights exist, regardless of the residency of the harvesting operation.”
← 45. Available at: www.ramle gacy.org; the name RAM derives from Ransom A. Myers who pioneered this work. (https://onlinelibrary.wiley.com/doi/full/10.1111/j.1467-2979.2011.00435.x).
← 46. It would be possible to make a different choice (e.g. that it falls at the end of the accounting period) as this is merely a convention. However, in order to standardise the approach, a decision had to be made and this was the recommendation of the EGNC and is consistent with 2025 SNA (§18.117) which mentions that for flow variables the desired valuation point is usually the mid-point of the period.
← 47. For recovering resources (e.g. where the fishery is closed for a number of years), the asset value can be estimated based on NPV of resource rents, where these rents are assumed to be equal to the average rent when the fishery was exploited, discounted based on when the fishery is expected to open again (say X years from now). In case the future estimates do not change, the increase in value will be solely due to the unwinding of the discount rate (i.e. that we get one year closer to the resource rent being generated). This value increase (in the year it happens) should be recorded as negative depletion in the production and generation of income account. In the year that the decision was taken to close the fishery, the increase in value of the resource should be recorded as negative depletion.
← 50. The Food and Agricultural Organisation of the UN has defined areas of the sea for statistical purposes.
← 51. The 2010 ESA deviated from the 2008 SNA. “According to ESA 2010 §3.140 CFC is not to be calculated for animals, so for this asset, CFC applies to tree, crop and plant resources yielding repeat products. [...] For animals, ASL may nevertheless be used to calculate the gross stock with the PIM.” (UNECE, 2024[20])
← 53. However, “In all but exceptional cases, though, [aquatic resources maintained for reproduction] will be small and may be ignored unless of significant importance.” (2025 SNA, §11.215).
← 54. i.e. Forage products; fibre crops; plants used in perfumery, pharmacy, or for insecticidal, fungicidal or similar purposes; beet, forage plant and flower seeds; natural rubber; living plants, cut flowers and flower buds; unmanufactured tobacco; other raw vegetable materials.