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The Norway spruce (Picea abies H. Karst.)

The Norway spruce (Picea abies H. Karst.) is a large evergreen conifer, growingup to 30-50 metres in height, with a regular conical treetop. Side shoots are attached to the trunk in clear layers (whorls). They hang from the lower trunk, while on the upper trunk they stick out horizontally or are arched with their tips upwards. Spruce bark is brown-red and scaly, peeling off in thin flakes. Young shoots, yellow-brown in colour, are most often bare or almost glabrous. Spruce needles are prickly, dark green and glossy (1-2 cm in length). Female cones are light brown and cylindrical in shape. They are usually situated near the tree top, hanging from branches. The Norway spruce is a native coniferous tree, having its natural habitat in Central, Northern and North-Eastern Europe. It grows in vast forests on lowlands. In mountains it can be found in pure spruce or mixed-tree stands, being part of mountain spruce forests or mixed forests in the lower section of the mountains. Spruces are highly resilient to low temperatures but do not like periods of dry weather, they are also sensitive to air pollution.

Description in the Faculty’s nomenclature

The Norway spruce, as a tree, belongs to the assets held by an economic entity, while as a crop, it’s classed as a biological asset, in line with the International Standards of Financial Reporting. It takes at least 8 years (but it may also take over 120 years) for a tree to become an agricultural product, (i.e. timber, which is a product derived from an entity’s biological assets). What makes this possible is the fact that biological assets are capable of biological transformation, which results in their growth, ultimately leading to qualitative and quantitative changes. Agricultural products made of wood may take the form of needles, shoots, logs or timber. They subsequently go through machining. When transferred for further processing, (e.g.the production of spruce beer, made of needles and young shoots, or the production of planks and cellulose), they turn into inventory, stored by a given entity. Biological assets, agricultural products and related stock are usually insured by entities against harmful events.

Historical applications in the Faculty’s field

The majority of world paper production is based on cellulose isolated from spruce wood. Paper used to be necessary to issue numerous documents-shares, bonds, drafts, invoices, bank statements, payrolls, insurance policies and the like, providing the basis for economic transactions which were recorded in books of account. Paper was also needed to manufacture books. It was used to produce a variety of summaries, financial statements or present the results of analyses. Cellulose made the raw material for issuing banknotes, which first appeared in China in the tenth century. Its use expanded to Europe, when the first banks were established in Medieval Italy. For centuries, banknotes used to be pegged to precious metals, until they became purely paper money in early 1970s.

Modern applications in the Faculty’s field

The role that wood plays in today's world of finance is slightly different, though. Spruce timber has been - and still is - used in the manufacturing of musical instruments (many of which have their soundboards made of this type of wood). The famous Stradivarius violin is believed to have been made of spruce. The prices of such instruments are exorbitant. They are currently sold for millions and highly sought after by investors, particularly during times of turmoil in the financial markets. One more attribute of spruce timber might be worth consideration. It's valued greatly for emitting warning signals, (i.e. cracking before a structure is going to collapse). Should it act as a support for the international financial system, we would know how to predict a financial crisis. The presence of spruce wood in finance may also be traced in a different way. Modern finance and accounting -with its electronic documents, computer systems and plastic money - might be perceived as a tool for the protection of spruce trees.

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