Calculating Material Damage and Losses: A Forensic Expert's Method

When material damage is at stake in criminal or civil proceedings, the court is not interested in an “eyeballed” estimate. It needs a reasoned figure backed by documents. A forensic economic examination answers exactly this question: how large is the loss, with a reference to every underlying source document. Below I explain the logic of the calculation, its legal basis, the data it relies on, and the typical mistakes that make a conclusion impossible. This material is for general information and does not replace advice tailored to the specific circumstances of a case.

Legal basis: what the law calls damages

The Civil Code of Ukraine (Tsyvilnyi kodeks, TsK) distinguishes two components of losses (Article 22 of the TsK):

• Real damages — the losses a person suffered as a result of the destruction of or harm to property, together with the expenses the person has incurred or must incur to restore the violated right.
• Lost profit — the income the person could realistically have received under ordinary conditions had the right not been violated.

These categories are calculated differently and require different evidence. Real damages are usually supported by direct documents — acts, delivery notes, payment orders. Lost profit is harder: it cannot be built on assumptions. It requires evidence of a real, not hypothetical, opportunity to earn the income — for example, concluded contracts, an established pattern of supplies, a confirmed markup. Without such a basis, foregone profit remains a probability that an expert calculation does not record.

Article 623 of the TsK stands separately — compensation for losses caused by breach of an obligation. It matters because it states directly which prices and which date to use when determining the amount. More on the date shortly: it is one of the key technical points of the whole calculation.

Scope of competence: what the expert does and does not calculate

The calculation of financial and credit losses falls under forensic specialty 11.3, “Examination of documents on financial and credit operations,” within forensic economic examination; adjacent questions of accounting, reporting and economic activity belong to specialties 11.1 and 11.2. Such examinations are typically ordered in cases handled by detectives of the Bureau of Economic Security (Byuro ekonomichnoyi bezpeky, BEB), based on inspection materials from the State Tax Service (Derzhavna podatkova sluzhba, DPS) or information from the State Financial Monitoring Service, as well as in commercial and civil disputes.

The methods the expert uses are not arbitrary. They are defined by the Scientific and Methodological Recommendations on the preparation and assignment of forensic examinations (an annex to Ministry of Justice Instruction No. 53/5) and by methodologies entered in the state Register of Forensic Examination Methodologies. That is the boundary of the permitted toolkit: the expert applies registered, validated methods, not homegrown formulas.

Just as important is what the expert does not do:

• does not establish guilt or assess whether a person is “guilty”;
• does not give a legal qualification to an act (theft, misappropriation, abuse, and so on);
• does not decide whether a crime took place at all;
• does not substitute for the court on questions of law.

The expert answers only questions that require specialised economic knowledge: whether a given amount is documentarily supported, what its size is, whether the transactions match the accounting records. Legal conclusions are the prerogative of the investigator, the detective, the prosecutor and the court.

Data sources: every figure comes from a document

The core principle of economic examination is documentary support. In a sound conclusion there is not a single figure “pulled from the air”: each amount traces back to a specific record.

Typical sources include:

• primary documents — delivery notes, acts of completed work, cash and sales receipts, expenditure and receipt orders;
• accounting registers — turnover-and-balance sheets, account cards and analytics, the general ledger;
• bank statements — the movement of funds through accounts;
• contracts and their annexes — terms, prices, deadlines, penalties;
• financial and tax reporting.

In practice, it is precisely the quality and completeness of these documents that determine whether a calculation is possible at all. If the file contains a contract but no payment documents evidencing its performance, the amount paid is not proven, and the expert has no right to “fill it in” from the logic of the deal or from a party’s explanations. Moreover, data from different sources are cross-checked: the amount on a delivery note must agree with the accounting entry and with the movement of funds on the statement.

The date as of which the amount is determined

The size of a loss is a value tied to a date. The same assets have different values in different periods, so without a clear date the figure loses meaning.

The reference points are set by the law and the case file:

• in contractual relations — the rules of Article 623 of the TsK: market prices on the day the claim is voluntarily satisfied or, if it is not satisfied voluntarily, on the day the lawsuit is filed; in certain cases the court takes into account prices on the day the decision is rendered;
• in criminal proceedings — as a rule, the date of the act or the date fixed in the document assigning (engaging) the examination.

That is why one of the first points to agree on is the date as of which the damage is determined. Changing the date can materially change the amount — and this is not “fitting the result,” but the correct application of the methodology.

The damage threshold in NMDH

The size of the loss affects the qualification of property crimes in criminal proceedings. The thresholds are set by the notes to the relevant articles of the Criminal Code of Ukraine (Kryminalnyi kodeks, KK) — in particular Article 185 (theft) and Article 191 (misappropriation, embezzlement of property, or taking it by abuse of official position) — and are expressed in tax-free minimum incomes of citizens (neopodatkovuvanyi minimum dokhodiv hromadyan, NMDH).

Category	Reference (in NMDH)
Significant harm	from 100 to 250 NMDH, taking the victim’s financial situation into account
Large scale	250 NMDH and above
Especially large scale	600 NMDH and above

An important nuance: for the qualification of criminal offences, the NMDH equals not the historical UAH 17, but the amount of the tax social benefit — that is, 50% of the subsistence minimum for an able-bodied person as set by law on 1 January of the relevant year (paragraph 5 of subsection 1 of section XX of the Tax Code of Ukraine). The hryvnia value of the threshold changes each year, so it must be computed as of the moment the act was committed.

And, once again, on boundaries: classifying an amount as “large” or “especially large” scale is a qualifying feature that the investigation and the court establish. The expert provides the exact amount and, if needed, its arithmetic ratio to the NMDH; the legal assessment is not for the expert to make.

Typical mistakes that make the amount “uncountable”

Calculation “from words”

The most common situation is when the only source of an amount is a party’s explanation, with no primary documents. Economic examination does not work with oral assertions: if the amount is not documentarily confirmed, the correct outcome is a conclusion that it is impossible to answer on that point — not an “approximate” figure. This is not a refusal to work but an honest result that protects the conclusion from later reversal.

Mixing real damages and lost profit

Trying to calculate foregone profit from the same documents used for direct losses produces an inflated or unproven amount. These two components are calculated separately and on different evidence.

Ignoring the date and the pricing period

Calculating “at today’s prices” where prices as of the date of the event are required distorts the result — even with flawless arithmetic.

Questions outside competence

Wording such as “is the person guilty of causing the losses” is left unanswered by the expert as a legal question — and rightly so. When the assignment document contains such questions, they should be reworded at the stage of ordering the examination.

How the calculation is built: step by step

1. Clarify the questions and the date as of which the damage is determined.
2. Inventory the documents provided and assess their completeness and suitability for examination.
3. Select a registered methodology matched to the specific task.
4. Trace every amount back to a primary document and an accounting register.
5. Calculate real damages separately and — where evidence exists — lost profit.
6. Formulate the conclusion, with references to documents or with a justification of why an answer is impossible.

This approach makes the conclusion robust: every figure can be verified and every step reproduced. That is what distinguishes an expert calculation from an “eyeballed” estimate, which is easy to refute in court.

If you need to determine the size of material damage or losses in a specific case, it is advisable to gather the primary documents in advance and seek advice before the examination is even ordered. This saves time and substantially increases the chance of obtaining a well-founded conclusion rather than an “impossible” one.