Nourished by little more than sunshine and water, the balance sheet of UPM-Kymmene is expanding skywards. The Finnish paper group treats its pine and spruce "assets" as if they were shares or bonds, revaluing the trees regularly so each centimetre of growth translates into a financial gain.
This is one of many book-keeping novelties inspired by the European Union's introduction of international accounting standards, which require companies to produce many figures they have not previously disclosed and report other data differently. Pricing 1m hectares of forest requires some mind-bending mathematical models - and there are doubts about whether the result is of any use. Kari Toikka, UPM's chief financial officer, says: "An old accountant like me sometimes asks: does it all make sense? What does the balance sheet now show?"
Hundreds of other finance directors are asking the same questions as they reflect on their half-year results, the first prepared under International Financial Reporting Standards. The result, nine months into a project designed to take the EU closer to a borderless market, has been an alarming drop in enthusiasm for IFRS.
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