Methodological issues for valuing wartime damages in Ukraine suffered by domestic enterprises due to the destruction and damage of fixed assets

Анотація

Armed aggression in Ukraine emphasized the relevance of wartime damage valuation for both public and private sectors. Stakeholders from private sector are interested in damage valuation for the purposes of claiming for compensation in courts and presenting the information about revaluation and Impairment of assets in financial statements. Damage valuation for compensatory purposes poses a lot of uncertainty because requires development of relevant methodological framework as well as lacks practical cases on national grounds for application of damage valuation. Critical analysis of the methodological framework for wartime damages valuation indicates a number of shortcomings such as nor clear definition of the concept of “damage” and its link to actual losses and loss of profit, failure to account for economic obsolescence when estimating actual losses, lack of application of income and market approaches toward estimation of actual losses, rule-based approach toward calculation of lost profits, etc. By relying on international experiences of valuation for compensations’ claiming in courts, tribunals, arbitrages the author proposed a set proposals that might serve as potential solutions for existing methodological issues.

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