In Kazakhstan, it is necessary to distinguish between the sector-specific inventory of forest plantations and the accounting inventory of assets and liabilities.
The sector-specific inventory is regulated by Order No. 17-02/532 of the Acting Minister of Agriculture of the Republic of Kazakhstan dated 19 October 2012. The Rules establish the procedure for inspecting forest plantations, nurseries, areas where measures have been taken to promote natural forest regeneration, and areas left for natural revegetation within the State Forest Fund. They provide for the composition of commissions, the time frames for carrying out the work, the use of field cards, the assessment of plantation survival and preservation, and the preparation of documents for destroyed stands.
The accounting inventory is conducted separately in accordance with the general Accounting Rules approved by Order No. 241 of the Minister of Finance of the Republic of Kazakhstan dated 31 March 2015. Its purpose is to ensure the reliability of accounting records and financial statements and to verify the availability of property and the validity of liabilities.
Thus, the results of the field inspection of forest plantations serve as the basis for subsequent management and accounting decisions, but do not in themselves replace accounting documents or the procedure for recording inventory results in the accounts.
When applying the sector-specific rules, their scope and the current version of the regulatory legal act must be taken into account.
Inventory of forest plantations: who and what it covers
Forest plantations may involve planting, supplementary planting, maintenance, restoration of areas, and other forestry work. For an accountant, attention must be paid not only to the area itself, but also to the documentation of business transactions: materials used, work performed, costs incurred, settlements with contractors, property held in custody, and the organisation's liabilities.
According to paragraph 61 of the Accounting Rules, all property is subject to inventory regardless of its location. Property that does not belong to the entity but is recorded in its accounts must also be inspected: property accepted for safekeeping, leased, received for processing, or accepted on commission. The inspection also includes property that, for any reason, was not previously recorded, as well as all types of liabilities.
This means that when work involving forest plantations is carried out, the inventory commission must determine the full list of items to be inspected. For example, materials, equipment, work in progress, documents relating to contractor services, and settlements under concluded contracts may be inspected separately. Specific expenses and work results should be allocated to a particular accounting item on the basis of the accounting policy and source documents, rather than solely on the results of a visual inspection of the area.
Rules for conducting an inventory of forest plantations
The general procedure requires an inventory of assets and liabilities to be conducted at least once a year to ensure the reliability of accounting records and financial statements. An exception is provided for small businesses with no more than ten employees: they determine the inventory period independently. These provisions are set out in paragraph 60 of the Accounting Rules.
Management establishes the number of scheduled inspections during the reporting period, their dates, and the list of assets and liabilities to be inspected in the accounting policy. Therefore, it is advisable for the organisation to coordinate the accounting schedule with the field inspection season in advance. Such coordination helps obtain factual information at a time when the condition of the plantations can be properly assessed and promptly compared with the documents.
In addition to scheduled inspections, paragraph 62 provides for the following cases in which an inventory is mandatory:
when the financially responsible person changes — as of the date of the handover;
when theft, abuse, or damage to property is identified;
after a natural disaster, fire, accident, or other emergency;
when the entity is reorganised, before the separation balance sheet is prepared.
For a forestry organisation, events capable of affecting the preservation of property or the results of completed work are particularly significant. However, an accountant should not independently determine professional indicators relating to the condition of stands: the factual characteristics must be confirmed by competent specialists and proper documentation.
Conducting an inventory of plantations: procedure
An inventory commission is established to inspect assets and liabilities. Its composition is approved by an order of the entity's management. If forest plantations need to be assessed directly on site, employees capable of identifying the areas and explaining the contents of the forestry documentation should be involved in the work.
The practical procedure may be organised as follows:
- Issue an order and determine the composition of the commission, the items, dates, and responsible persons.
- Prepare a list of the areas, property, costs, contracts, and liabilities to be inspected.
- Obtain accounting registers, source documents, and information from the relevant departments.
- Conduct the physical inspection and document its results.
- Compare the factual information with the accounting records.
- Review discrepancies, establish their causes, and document management's decision.
- Record the approved results in the accounts on the basis of proper documentation.
Before the inspection begins, the commission members review the materials from the previous inventory and the measures taken based on its results. They also obtain the latest registers of receipt and expenditure documents or reports on movements of the property being inspected. If storage locations are being inspected, the commission performs the preparatory actions stipulated by the Rules, including access control and inspection of the measuring instruments used.
Before the procedure begins, financially responsible persons provide written confirmations that property received has been recognised and property disposed of has been written off. For work involving forest plantations, this helps distinguish factual discrepancies from documents that have not yet been submitted to the accounting department.
What the accountant should check after the field inspection
A report by the relevant specialists does not in itself replace accounting documents. The accountant must check whether the inspection results can be clearly linked to a specific area, contract, stage of work, and accounting item. The name of the area and other identifiers must be used consistently in all related documents.
Particular attention should be paid to:
whether the work actually performed complies with the terms of the contract and the source documents;
the availability of documents for materials transferred to a department or contractor;
the accuracy of information on safekeeping and leases;
the existence of unrecorded property or transactions not submitted to the accounting department;
the validity of recorded liabilities and settlements;
implementation of decisions made after the previous inventory.
If discrepancies are found, they cannot be corrected solely on the basis of an oral report. The commission must document the results, obtain explanations, and submit the materials to management. Accounting entries are made after the results have been properly documented and approved in accordance with the procedure adopted by the organisation.
Special rules for the inventory of forest plantations may establish professional indicators, forms, and procedures for field inspections. Since such provisions are absent from the data provided, the current version of the sector-specific regulatory legal acts of the Republic of Kazakhstan must be checked as of the date of the work before internal regulations are approved.
Frequently asked questions
Are the inventory of forest plantations and the accounting inventory the same thing? — No. The field inspection establishes the actual condition of the plantations, while the accounting procedure compares confirmed information on assets, costs, and liabilities with the accounting records.
How often should an accounting inventory be conducted? — As a general rule, assets and liabilities are inventoried at least once a year. Small businesses with no more than ten employees determine the inventory period independently.
Who approves the commission? — The composition of the inventory commission is approved by the entity's management by its order.
Is it necessary to inspect property that does not belong to the organisation? — Yes, if it is recorded in the accounts, for example, if it is held for safekeeping or used under a lease agreement.
Where can the special rules for conducting an inventory of forest plantations in the Republic of Kazakhstan be found? — They should be sought in the current forestry regulatory legal acts. The current version must be checked before application, since the general accounting rules do not establish a methodology for assessing the condition of stands.
Sources
Accounting Rules: Chapter 4 “Inventory Procedure”
Rules for the Inventory of Forest Plantations — Order No. 17-02/532 on “Adilet”
Accounting Rules — Order No. 241 on “Adilet”