Accounting for Forests in Social, Economic and Political Contexts

The current paper investigates the potential implications of the emerging forestry accounting policy—in the form of Discussion Paper No. 23 (DP 23) Accounting for self‐generating and regenerating assets, Exposure Draft No. 83 (ED 83) Self‐generating and regenerating assets, and AASB 1037 Self‐generating and regenerating assets—for the accounting practices of Australian forestry enterprises in the private and public sectors. Since the forestry sector is of political, social and economic significance to a broad range of individuals and groups within society, a theoretical framework is adopted which combines stakeholder, legitimacy and political economy of accounting perspectives. In particular, the current paper is concerned with two major objectives. First, this multi‐perspective theoretical frame‐work is used to discuss the potential implications of the recent developments in forestry accounting policy in light of current forestry accounting practices, and the major economic, political and social factors operating within the forestry sector. This discussion also allows several observations to be made in relation to the due process associated with the development of accounting standards. The second objective of the paper is to use the multi‐perspective theoretical framework to discuss the results of a postal survey of forest managers’ reactions to the forestry accounting regulation. Evidence from the survey of forest managers suggested that there is opposition to mandated environmental disclosures (proposed in DP 23, but not required by AASB 1037), and the introduction of volatility in the bottom line from current market valuations (required by AASB 1037) and recognition of changes in the value of forest assets (required by AASB 1037).