It looks sound today. How long does it last?
For those about to put capital into timberland, farmland or any asset that grows, and who would rather know its condition before the money moves.
A valuation reads the present.
Due diligence reads title, yield, comparable sales and cash flow. Each describes the asset as it stands today, and each assumes the living system beneath it will carry on in the condition it appears to be in.
Nobody is asked to declare that assumption. It sits inside the price, unexamined.
Not what can I get out. How long does this last?
An asset that grows is an asset that ages. Soil, water, root and canopy each hold a condition, and that condition decides how many seasons the yield can be relied on, whatever the spreadsheet projects.
A write-down is the day the condition is finally admitted.
The asset is the living system. The financials are its shadow.
A declaration before the money moves.
Origin Risk declares the condition of a living system on a stated date: its age in the sense that matters, the state it is in, and the time it has left in that state.
It is a statement of the ground beneath the asset, made before the transaction and not after the loss. It is the reading the asset has never had.
Price the time left.
Two assets can look identical on the day of purchase and be years apart in what remains of them. Declared before you commit, that difference can be written into the terms, the structure and the hold period, or it can be the reason to walk away.
Lenders and insurers will ask the question eventually. It is better to have the answer first.
The method, in outline.
- Identify the living systemWhat it is, where it sits and how far it extends, drawn to the scale at which it can be read.
- Read its condition against the StandardThe same questions, asked the same way, of every system, so that two declarations can be compared.
- Declare its state on a stated dateA dated statement of condition and time remaining. Not a prediction of what will happen to it.
- Declare again as the condition movesEach declaration can then be held against what happened next.
The method is disclosed in outline. The weightings and the component model behind each declaration are not published.
The first standard of its kind.
The Biological Time Classification Standard was authored by Matthew Ross. It is the first published standard for declaring the condition of a living system, and the language of this page comes from it.
The classifications themselves are not published openly. They are available to registered readers and to those who commission a declaration.
Begin with the asset, before the money moves.
We take a small number of enquiries and ask a few questions first. Write to us with:
- Your organisation and your role
- The asset, its region and the stage of the transaction
- The decision this reading would inform
info@originrisk.com
Enquire