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How can farmers correctly record losses?

Among all businesses, the Ukrainian agricultural sector suffered perhaps the most. According to the Kyiv School of Economics, losses in the agricultural sector amount to 4.3 billion dollars. The country's leadership is working to create mechanisms to compensate for these losses, but in order to receive maximum guarantees of compensation, it is necessary to correctly record the losses.

Why record losses?

Of course, the first thing is the opportunity to receive compensation for future losses. This can be compensation from the state, international aid, and the possibility of collecting funds from the aggressor in international courts in the future.

At the same time, fixing damages is not only about compensation, but also about the performance of contracts. As a result of the destruction and damage of property, agricultural enterprises cannot fulfill their obligations under contracts, which may lead to the imposition of fines. Therefore, the correct recording of losses will help to confirm force majeure circumstances or to terminate or amend contracts on the basis of a significant change in circumstances (Article 652 Civil Code of Ukraine). Also, correct fixation is necessary for correct tax accounting, write-off of assets, calculation of depreciation, etc.

What losses should be recorded?

On March 20, the Government accepted Resolution No. 326 "On Approval of the Procedure for Determining Damages and Damages Caused to Ukraine as a Result of Armed Aggression by the Russian Federation". The specified resolution determines the directions of losses, according to which it is necessary to carry out fixation. Among them are economic losses of enterprises, losses of the land fund, losses of the water area, etc.

If we talk about the losses of agribusiness, then we are talking first of all about crops and crops, losses caused to land and soil, water fund, damages caused to real estate objects and vehicles. In addition to direct losses, it is also worth recording the lost profit, that is, the income that the business could actually receive under normal circumstances.

Where to contact and how to record losses?

In the case of fixing losses on the territory under the control of Ukraine, it is necessary to contact the law enforcement authorities with a statement about the commission of a criminal offense. The materials collected by the law enforcement officers within the framework of criminal proceedings will be almost the best way to confirm the existence of damages. During the report of the inspection of the scene, the maximum amount of information should be provided in order to record all the destroyed and damaged objects. Applications must be written to the Security Service of Ukraine, or to the police.

In case the objects are damaged due to fire, it is necessary to contact the State Emergency Service and subsequently receive relevant evidence from the service for fixing the damage. Fixation of the damage caused to the land will be carried out by officials of the State Environmental Inspectorate, and of the water fund by the State Water Agency.

In addition to contacting the relevant authorities, it is necessary to independently record the damage, take photos and videos, and collect explanations from witnesses. It is also worth conducting an inventory and drawing up relevant acts at the enterprise with the involvement of employees and representatives of military administrations. Independent registration must also be carried out when the enterprise is located in the occupied territory and does not have the opportunity to apply for registration to state authorities.

How to prove the amount of damages?

In addition to fixing the fact itself and the objects that suffered damage, it is necessary to understate their value. The evidence that confirms the value is information about the book value of objects. In addition, it is necessary to collect documents confirming the fact of acquisition of objects. Namely, vehicles, agricultural machinery, seed material, livestock, etc. It is also worth collecting evidence that confirms the costs of building real estate. As for the confirmation of crop losses, it is worth collecting evidence that confirms the yield in previous years.

To prove the lost profit, you need to collect documents that can confirm future income (for example, contracts), as well as documents that confirm income for previous periods.

Fixation of damage to real estate

On April 5, 2022, the Cabinet of Ministers of Ukraine adopted Resolution No. 423 "On Amendments to the Procedure for Inspection of Commissioned Construction Objects", which defines the mechanism for conducting an inspection of construction objects damaged as a result of emergency situations, military actions or acts of terrorism.

Inspections are carried out by involving specialists with appropriate qualifications, namely: responsible executors of certain types of work (services) related to the creation of architectural objects, or by involving enterprises, institutions and organizations that include such executors.

These specialists prepare detailed reports, which contain information about real estate, its damage, as well as damage to movable property and engineering systems.

Recording of damage caused to land

The Ministry of Environmental Protection and Natural Resources of Ukraine by Order No. 167 dated 04.04.2022 approved the Methodology for determining the amount of damage caused to land and soil as a result of emergency situations.

The facts of soil pollution and/or soil contamination are established by the officials of the State Environmental Inspection through inspection of land plots, data of remote sensing of the land, studies of the received samples of soil samples, processing of expert opinions, explanations, certificates, documents, operational reports of individuals and legal entities, etc.

The amount of damage is calculated according to the formulas given in the methodology. Different formulas will be used for the calculation. For example, damage from soil pollution will be calculated on the basis of the regulatory monetary assessment of the land plot, the soil of which was contaminated.

As you can see, a lot of work needs to be done in order to correctly fix the losses, and at the same time, such fixing will be a guarantee of receiving compensation. The state is gradually developing the legal framework and procedures for recording losses, and there are already many online services that help to record losses correctly. The main conclusion that should be drawn: there are not many documents, and even if you have applied to the state authorities for registration, it is better to carry out the registration yourself and collect the maximum amount of evidence.

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