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Valuation of assets

Outcome paper:English
Cover note:English
Comment template:English
Global consultation status:Open
Deadline for comments:06/12/2010
Number of comments:27
Comments from the global consultation
Posted onProvided byComments
17/12/2010Peru/INEI1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes. The quota system, which is also used in Peru, like in the Anchoveta (Anchovy) sea resource, provides better elements to obtain better and sturdy estimations in the valuation of fish stocks. On the other hand, using indirect methods through valuation models like the Net Present Value (NPV), gives as a result the appropriate estimations, based on the estimation of future flows of income of the natural resource been evaluated. About this, the best discount rate to choose must be increased to discount the income and outcome flows, mentioning in the manual the development of the methodology of its calculus and practice application.
15/12/2010Philippines/National Statistical Coordination Board 1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes. The use of information on quotas can be just one of the means of having an estimate of the value of fish stock. This approach may be applicable to countries with stable market (supply/demand) however, what is more important is to have a standard or uniform method in the valuation of fish stock. In our case, if NPV will be the standard method what is more relevant are some guidelines/recommendations in the choice of discount rates and treatment of negative income flows.
  2. Any other comments?
No other comment
14/12/2010Statistics Finland1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
13/12/2010New Zealand / Statistics New Zealand1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes, Statistics New Zealand has used information on quotas from the New Zealand Quota Management System (NZQMS) to value fish stocks for several years now. We are confident that they provide a robust estimate of the value of New Zealand''s commercial fish stocks. However, it should be noted that the method presented is best applied where fishing quotas are freely brought and sold in a well functioning market – as is the case in New Zealand. This is not necessarily the case for all countries. It is also important to note that in New Zealand there is an assumption that fish are being harvested at a sustainable rate as this is a key objective of the NZQMS. Again this may not be the norm for all countries. Furthermore, it is acknowledged that the discount rate is a pivotal variable and is often the subject of considerable debate.
07/12/2010Bulgaria / National agency of fisheries and aquaculture1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
No comment
07/12/2010Australia/ Australian Bureau of Statistics1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Agree. The ABS also notes the greater confidence in price signals where trading schemes contain a significant volume of trades (as seen in the introduction of annual rights (ACE) in NZ).
06/12/2010United Nations Statistics Division1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
  2. Any other comments?
No comments
06/12/2010Mexico / INEGI1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
We agree that the proposed valuation methods remains in the revised SEEA. In addition, an emphasis on the assumptions that includes the valuation should be done, such as the fact that fisheries are conducted in a free market and the fact that its will be managed in a sustainable manner, this is not very common around the world''s fisheries. In the case of the use of discount rates it is important to establish mechanisms for the international comparability.
  2. Any other comments?
It is important to make an effort to the review of economic valuations, since the different kinds of valuation, and its assumptions would affect the comparability of the state that fish stocks in the world keeps. Additionally, it is necessary to consider the development of methods for valuation of fisheries resource depletion.
06/12/2010Norway/Statistics Norway2. Any other comments?
The paper does not seem to take into considerations the arguments in issue paper 4 (about renewable energy) that discusses different rents (Ricardian, Hotelling and Monopoly rent). For many resource assets we are confronted with imperfect markets which imply that monopoly rent is very important. Is this really to be counted as a value of the asset? - The title of this outcome paper is general while the paper really addresses the valuation of a fish stock based on a net present valuation of future rent. - How general is this paper for advocating for the calculation of value of resource assets?
06/12/2010France/ Ministry in charge of Ecology – Statistical department1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Agree in general principle. However, this marketed based method has limitations when it comes to its practical implementation. Till further notice, the Quota Management System (QMS) introduced in New Zealand is not applied worldwide. Indeed in Europe, fishing quotas are established but they only determine a maximum quantity to be captured. They are not exchanged on a market and have no monetary value, by absence of market pricing. On that account, what is to be done when no system with transferable quotas are in place – with no price for stocks? The text gives the possibility to value the stocks with the residual method (resource rent) but expresses reservations on its use. By the way the comparison between the results given by both methods shows large divergences. Additionaly, the outcome paper assumes in both methods a sustainable management of fishery. This assumption allows to simplify the valuation of the stocks since the same rent amount is supposed to come back every future year. After a look at the table 2 we wonder if this assumption is acceptable. Indeed the variations of the resource rent are very strong along the period. In presence of such volatility, the assumption that the resource rent amount can be earned indefinitely cannot be made. It could be argued that these erratic variations disqualify the residual value method and that the market based method has to be used. Unfortunately the paper does not give enough information in order to verify the constancy of the rent (ACE) based on this other approach, preventing to opt positively for the market based approach. It only gives the valuation of the fish monetary stock accounts asset value but not the details (price of the ACE). Broadly speaking with the assumption of a sustainable management the paper is limited to a particular case which is supposed to be the general rule. So the respective impacts of depletion and natural growth (if separated measures are feasible) on the valuation of fish stocks can not be discussed while these aspects were of importance in the issue #14. Anyway the item 44 should be transfered to the beginning of the text in order to present the context as an introduction.
  2. Any other comments?
* Table 1 p3 : This illustrative table should be a little commented. It would be interesting to know why hoki stocks have so much shifted upwards and downwards alike. This raises the question on whether it is a matter of quantity of fish (changes in the TACC) or a matter of price adjustment (to volume of offer and demand underlying the exchange on the market)? How is considered the impact of speculation on prices? * Pt 26, p4 : We don''t understand why the reasoning is based on a real rate (8%) since accounts evaluations are made at the start in nominal terms. * Pt 32b, p 6 : We agree with the need to exclude from the national accounts any non-fishing activity and non managed fishery activity (if enough information is available in this way). But nothing is said about aquaculture which is an important and increasing activity. In the national accounts aquaculture is not dissociated with fishing but from the point of view developed here it should be excluded since it concerns cultivated resources. This exclusion should be clearly stated in the text. * Pt 33a, p7 : the third condition (iii) is really important but how do we know if the fishery is managed on a sustainable basis? Should we trust the government choices (TACC fixing) or has the statistician to verify the sustainability with proper information (the primary information that the government is supposed to have exploited when assessing the TACC level)? This is an important issue. As a conclusion, considering both these relevance issues and the measurement capability issues, we wonder if the overall evaluation of fish stocks can be treated as an international standard in volume 1. It could be more relevant to transfer this topic to volume 2.
06/12/2010USA/BEA1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes, The SEEA 2012 should not only retain but expand on the SEEA-2003 to explicitly address the case where the NPV of the asset is derived from transaction prices in temporary rights to harvest. The discussion paper considers the case where the market value of the asset is derived from transaction prices in temporary harvesting rights (ACEs). The annual resource rent is derived as the TACC x transaction price. To obtain the NPV of the asset, this resource rent is then assumed constant in the NZ case, presumably because the TACC will be constant. E.g. paragraph 21: As the fisheries are managed on a sustainable basis, this resource rent is assumed to hold for all future years and the asset value for the species is set equal to the NPV of the future resource rents. This statement in bold is incorrect. “Sustainable management” is a necessary, but not sufficient, condition for “constant resource rent”. That is, if a fishery is sustainably managed, this is not in itself sufficient for the resource rent (or TACC, for that matter) to be constant. For example, if the fish stock is below the maximum sustainable yield (MSY) level, then sustainable management of the fishery necessitates that the current TACC be below the MSY, but that future TACC will grow over time as the stock level is rebuilt. In the US case, the federal government often restricts access to fisheries in order to build the stock level back up. In the future, the TACC will be much greater than the current TACC. In this example, assuming that the TACC will remain fixed in the future will result in an understatement of the value of the asset. This need to be pointed out to users when using the market price of temporary harvesting rights to estimate the value of the asset. In particular, “sustainable management” of the fishery is not sufficient for the TACC to be constant.
  2. Any other comments?
In paragraph 25 what is needed is a measure of capital services--and that requires a user cost of capital--not the return to capital.
06/12/2010Eurostat1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
No, We are unhappy that a world-level standard would actually instruct countries to assume fish stocks and current catch levels are sustainable, when we know that world-wide they are not. This is assuming away the problem SEEA is supposed to elucidate. Perhaps NPV could apply better to some other asset categories.
  2. Any other comments?
Maybe the point is covered somewhere, but in seas surrounded by many countries (like the Atlantic or Mediterranean) it is not clear that fish stay permanently in the EEZ of any one. Where then to account for them?
06/12/2010Statistics Denmark1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
06/12/2010Statistics Sweden2. Any other comments?
The revised SEEA needs to explicitly explain what type of valuation is meant by this section. Are we estimating the value of future income flows from fishing? The underlying assumption that the fish stocks are managed sustainably falls very quickly as it is apparent from current research that fish stocks are depleting rapidly due to over fishing in many sea waters. The paper presented to the LG is based on the experience of New Zeeland which needs to be complemented by other experiences from other countries.
06/12/2010Latvia/Central Statistical Bureau1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
06/12/2010Statistics Lithuania1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes, LT agrees that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks.
06/12/2010Iran/ Statistical Centre of Iran1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
06/12/2010Malaysia/Department of Statistics1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
No comment
  2. Any other comments?
1. The Department of Statistics Malaysia (DOSM) has no experience in developing any environmental account using the SEEA framework. However, DOSM is currently trying to develop one of the SEEA account (eg Water account) with the experience and knowledge gain while visiting Australia Bureau Statistics (ABS), and also with the guide of the SEEA 2003. However DOSM, experience constrains in developing this account with lack of expertise in this field, human resources and budget. 2. DOSM also wants to learn in detail how to develop the SEEA account. Please inform and include us if there is any training/workshop to be conducted in future. 3. Therefore DOSM is unable to contribute fruitful comments for the revision of the SEEA. However, DOSM would like to be involved in further development of this matter.
06/12/2010Switzerland, Federal Statistical Office1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes, Information on quotas and related trading schemes may be used as long as they have been elaborated by a) acknowledged governance which guarantees and certifies sustainable management of fish stocks and b) acknowledged and certified valuation methods of fish stocks. Monitoring of both governance and valuation methods should be taken over by FAO or another international organisation.
  2. Any other comments?
In the future, knowing that a) fishing pressure on fish stocks should remain high, b) climate change may affect fish stocks and c) physical valuation of fish stocks have proved sometimes far away of reality for many reasons (trade politics and commercial pressure, technical progress in fishing techniques, lacks of valuation methodology and assessment means), it would seem very wise to revaluate periodically the valuation methodology, and be aware that re-evaluation or devaluation of fish stocks may have to be performed periodically.
06/12/2010DoS Jordan1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
yes
06/12/2010Pakistan/Federal Bureau of Statistics1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Same “Reply” as given under Issue #4
06/12/2010United Kingdom/Office for National Statistics 1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes, The only question raised concerns the total allowable commercial catch. If it were to be kept artificially low it would be unclear how quotas would relate to actual stocks.
  2. Any other comments?
No.
06/12/2010Netherlands/ Statistics Netherlands1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
  2. Any other comments?
No
06/12/2010Azerbaijan/NSO1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
  2. Any other comments?
No comment
01/12/2010Republic of Mauritius/CSO1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
  2. Any other comments?
NO COMMENTS
11/11/2010Egypt/ CAPMAS1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
  2. Any other comments?
Egypt hasn''t any accreted fish stocks yet now
10/11/2010Tonga/ Statistics Department1. Do you agree that the use of information on quotas and related trading schemes can be used to obtain robust values of fish stocks and hence the proposed methods relating to the valuation of fish stocks described in the SEEA-2003 should be retained in the revised SEEA?
Yes
  2. Any other comments?
Appreciate to have relevant information on fish stocks.
 

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