Lost Profit of Ukrainian Enterprises from Russian Aggression: Kyiv Scientific Research Institute of Forensic Expertise explained how the evidence base for compensation is being formed
Kyiv • UNN
Thousands of Ukrainian businesses are suffering significant losses, including lost profits, due to Russian aggression. Forensic expertise is crucial to confirm damages and establish causation for compensation claims.
Thousands of Ukrainian businesses are suffering considerable losses as a result of Russian aggression. In addition to direct losses from the destruction of production facilities, most of them suffer lost profits because they cannot conduct normal business activities due to the enemy's attack. This type of damage should also be compensated by the Russians.
The experts of Kyiv Scientific Research Institute of Forensic Expertise told about the assessment of lost profits and the peculiarities of such studies in an exclusive interview with UNN.
According to experts, on the way to obtaining compensation, forensic examination is a tool for confirming the damage caused and a mechanism for establishing a causal link between Russia's military actions and the loss of income.
"The assessment of damages is carried out in accordance with international standards and Ukrainian legislation. The main indicators that experts work with when establishing losses for companies and enterprises are the destruction or damage to property, lost profits from the impossibility or obstacles to business activities, losses from unpaid goods, works and services provided and consumed in the temporarily occupied territories," the experts say.
At the same time, it is noted that the calculation of lost profits has its own specifics.
"According to Ukrainian law, lost profits are the revenues that a person could actually receive under normal circumstances if his or her right had not been violated. To assess the indirect damages, the average annual financial performance of the company for the past two years is taken and a projection of future cash flows is made using the appropriate expert methodology, using a discount, taking into account the company's retrospective performance.
It is important to note that business owners who have suffered should apply for the calculation of lost profits after the restoration of their violated rights. In simple terms, after the resumption of the enterprises' operation, in order to make the calculation of lost profits as efficient as possible and not to require further re-calculation for a new period," explains the experts of KFI.
At this stage, KFI cannot announce the total amount of losses incurred by Ukrainian enterprises in terms of lost profits. However, we are talking about millions of hryvnias for each case. These are funds that both business representatives and the state do not receive in the form of taxes. And all this must be properly documented.
"For the upcoming comprehensive litigation, conclusion and ratification of international agreements with partner countries to transfer sanctioned assets to a special fund that will compensate for losses, it is already important to properly record losses and prepare an evidence base," the experts conclude.
