# RICS Draft Professional Standard: Valuation of Woodlands and Forests, 2nd edition

# Draft: Valuation of Woodlands and Forests, 2nd edition

# Glossary

Acquisition/disposal cost | The cost associated with the acquisition or disposal of the property, usually including legal and agent's fees, as well as sales or purchase taxes. |

Cash flow | The movement of money by way of income, expenditure and capital receipts and payments. |

Comparable transaction | A property used in the valuation process as evidence to support the valuation of another property. |

Diameter breast height (dbh) | The overbark diameter of standing trees measured at 1.3m above ground level. |

Discount rate | The rate, or rates, of interest selected when calculating the present value of some future cost or benefit. |

Discounted cash flow (DCF) | A method of valuation explicitly setting out the expenditure and revenue over the agreed time limit. |

Internal rates of return | The rate of interest at which future project cash flows will be discounted in order that the net present value (NPV), of those cash flows be equal to zero. |

Maximum mean annual increment (MMAI) | The age at which the mean annual increment peaks. It is the rotation age which maximises timber volume production. |

Net present value (NPV) | The sum of the discounted cash values of a net cash flow including all inflows and outflows, where each receipt/payment is discounted to its present value at a specified discount rate. Where the NPV is zero, the discount rate is also the internal rate of return. |

Rotation | The complete life cycle of a tree crop measured in years, from initial establishment through to final felling (clearfell). |

Standing timber value | This is the current market value of the standing timber and is assessed by assessing the quantity of standing timber and then multiplying this amount by the current standing timber price. |

Top height | The height (metres), of the largest 100 diameter trees per hectare. It is frequently used as a parameter in growth models. |

Yield class | Measure of the rate of volume growth per hectare based on the maximum mean annual volume increment, using two cubic metre intervals between classes. |

Yield model | Tabular or graphic presentation of the future growth and yield development of a particular species and site productivity. |

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