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Application of accounting for the assessment of war losses for agribusiness enterprises of Ukraine

Author

Listed:
  • Zhuk, Valerii
  • Pugachov, Mykola
  • Shpykuliak, Oleksandr
  • Bezdushna, Yuliya
  • Popko, Yevheniya

Abstract

Purpose. The military aggression of the russian federation against Ukraine led to the disruption of logistics processes and the destruction of the production capacity of the agribusiness. This study aims to describe an accounting toolkit to determine and evaluate the direct losses of agricultural enterprises due to the war. Methodology / approach. This study is based on the use of Ukrainian regulatory documents. The authors of this study applied synthesis methods when summarizing information on estimates of war damage. They used analytical methods in monitoring the world and national experience of such assessment. The cost method was used during the approbation. It provided for the use of the estimate program “Building technologies: Estimate 8”. Determining the volumes of repair and construction works was carried out in accordance with the State Construction Standards and Resource Elemental Estimate Standards of Ukraine. In addition, modelling, analogy and comparison methods were also used. Results. In this study, the authors proposed a simple algorithm of actions, which allows for detecting direct damage by enterprises in a short time. The algorithm is based on the use of five accounting methods: (1) Inventory method, (2) Documentation method, (3) Evaluation method, (4) Accounts and balance method, (5) Reporting method. The specifics of the application of each method are described in detail, taking into account the requirements of accounting legislation for the recognition and assessment, and inventory of assets of agribusiness enterprises. Experimental calculations (using the example of damage to real estate as a result of hostilities) allowed us to conclude that the damage calculated by the individual (object-by-object) approach (USD 63.88 billion) is 30 % higher than the quick estimate of the World Bank (USD 50.4 billion) and 20 % higher than expert estimates made in Ukraine (USD 50.4 billion). Originality / scientific novelty. According to the research results, a methodical algorithm to estimate direct war losses for Ukrainian agribusiness enterprises based on accounting methods has been proposed. Using accounting tools to evaluate the direct losses is essential for the following reason. Let’s suppose that the accounting system does not confirm the data on direct losses. In this case, misunderstandings may arise between the participants of socio-economic relations, who operate with general (forecasted) figures. At the same time, verified accounting data on direct losses can be evidence in court and are the basis for receiving compensation or financial assistance. Practical value / implications. The practical significance of the proposed methodical algorithm lies in the ability to systematically recognize and assess direct losses of agribusiness enterprises, taking into account the specifics of their assets, based on the accountant's professional judgment, without the involvement of outside experts.

Suggested Citation

  • Zhuk, Valerii & Pugachov, Mykola & Shpykuliak, Oleksandr & Bezdushna, Yuliya & Popko, Yevheniya, 2023. "Application of accounting for the assessment of war losses for agribusiness enterprises of Ukraine," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 9(3), September.
    • Handle: RePEc:ags:areint:341535
    DOI: 10.22004/ag.econ.341535
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    References listed on IDEAS

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    1. Niamh M. Brennan, 2022. "Methodological insights: interview quotations in accounting research," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 35(9), pages 382-411, November.
    2. Vasylishyn, Stanislav & Ulyanchenko, Oleksandr & Bochulia, Tetiana & Herasymenko, Yuliia & Gorokh, Oleksandr, . "Improvement of analytical support of economic security management of the agricultural enterprises," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 7(3).
    3. Han, Hongdan & Shiwakoti, Radha K. & Jarvis, Robin & Mordi, Chima & Botchie, David, 2023. "Accounting and auditing with blockchain technology and artificial Intelligence: A literature review," International Journal of Accounting Information Systems, Elsevier, vol. 48(C).
    4. Valerii Zhuk & Yuliia Bezdushna & Yevheniia Popko, 2022. "Depreciation of Enterprise Assets in Wartime," Oblik i finansi, Institute of Accounting and Finance, issue 1, pages 5-12, March.
    5. Nataliia Vygovska & Andriy Polchanov, 2019. "Estimation of the Losses of the Ukraine's Financial Potential from Military Conflict," Oblik i finansi, Institute of Accounting and Finance, issue 4, pages 70-77, December.
    6. Stratopoulos, Theophanis C. & Wang, Victor Xiaoqi, 2022. "Estimating the duration of competitive advantage from emerging technology adoption," International Journal of Accounting Information Systems, Elsevier, vol. 47(C).
    7. Duan, Huijue Kelly & Vasarhelyi, Miklos A. & Codesso, Mauricio & Alzamil, Zamil, 2023. "Enhancing the government accounting information systems using social media information: An application of text mining and machine learning," International Journal of Accounting Information Systems, Elsevier, vol. 48(C).
    8. Achilli, Giulia & Busco, Cristiano & Giovannoni, Elena & Granà, Fabrizio, 2023. "Exploring the craft of visual accounts through arts: Fear, voids and illusion in corporate reporting practices," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 94(C).
    9. Andrii Kulyk, 2022. "Specifics of Asset Impairment in the Conditions of Armed Aggression," Oblik i finansi, Institute of Accounting and Finance, issue 4, pages 5-12, December.
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    Cited by:

    1. Stanislav Vasylishyn & Yuliia Nezhyd, 2024. "Methodical Approaches to Accounting and Controlling Agricultural Enterprises' Property under Martial Law," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 5-14, June.
    2. Valerii Zhuk & Yuliia Bezdushna & Nataliia Zhuk & Volodymyr Pavlenko, 2023. "Methodology of Expert and Accounting Assessment of Damage and Losses from the War in Ukraine," Oblik i finansi, Institute of Accounting and Finance, issue 4, pages 11-25, December.

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