Methodology for Assessing Damage Caused to Business Entities in Connection with the Armed Aggression of the Russian Federation

The full-scale invasion of the Russian Federation has caused huge losses for Ukrainian business. Destroyed production facilities, damaged property, shutdowns, lost markets - all of this needs to be properly assessed. That is why the state has developed a methodology for determining the damage and losses incurred by business entities as a result of Russian aggression.

1. 1. Legal framework

The methodology was approved by a resolution of the Cabinet of Ministers of Ukraine and is used both in national compensation procedures and to prepare materials for a future international compensation mechanism. It is based on the provisions of:

• Civil Code of Ukraine (Article 22 - compensation for damages);

• of the Commercial Code of Ukraine;

• accounting legislation;

• international valuation standards.

2. Types of damage to be assessed

The methodology provides for the calculation of the following categories of losses:

• Direct material damagedestroyed or damaged buildings, equipment, transportation, raw materials, and finished products.

• Lost profitslost income due to downtime and inability to conduct business.

• Additional costscosts of restoring property, renting alternative premises, and relocating business.

• Losses from inability to use assets (e.g., occupied land or production facilities).

3. Sources of information for the assessment

They are collected to confirm the damage:

• accounting and financial statements;

• inventory lists;

• inspection reports of the destroyed property;

• photo and video recording;

• expert opinions of independent appraisers;

• certificates from the authorities and law enforcement agencies.

4. Calculation methods

The methodology allows for different approaches depending on the type of asset and data availability:

• Cost approach - determining the cost of restoring or replacing the destroyed property.

• A comparative approach - analysis of market prices for similar assets.

• Income approach - calculation of lost profits based on projected revenues that the business could have received without the aggression.

5. The role of independent evaluators

Certified appraisers are involved to ensure the validity and legitimacy of the calculations. Their reports serve as official evidence for submission to courts, government authorities and international institutions.

6. 6.

A properly conducted damage assessment is the basis for:

• filing lawsuits against Russia in national courts;

• applying to the European Court of Human Rights (ECHR);

• participation in the future international compensation mechanism;

• negotiating with insurance companies or partners.

Conclusion.

The methodology for assessing the damage caused to business entities as a result of Russia's armed aggression is a critical tool for protecting business interests. It allows us to systematically record losses, document them, and create legal grounds for future compensation.

📌 Businesses should record losses and engage expert appraisers today to have a proper evidence base for restoring justice.