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Tags: business | losses | russia | write-offs | billion | wsj

Business Losses From Russia Near $60 Billion

an exxon sign is seen at a station in manassas, virginia
(Karen Bleier/Getty Images)

By    |   Friday, 10 June 2022 09:07 AM EDT

International companies have lost nearly $60 billion as result of exiting or reducing operations in Russia, The Wall Street Journal reported Friday.

Nearly 1,000 Western businesses have pledged to stop or curtail operations in Russia after President Vladimir Putin's unprovoked invasion of Ukraine, Yale researchers found.

Those companies have lost more than $59 billion, WSJ reported Friday.

WSJ added that more financial pain was expected as sanctions hit the Russian economy and sales and shutdowns continue, according to a review of public statements and securities filings.

Companies are reassessing the reported value of their Russian operations, WSJ reported. Businesses under U.S. and international reporting standards are required to take impairment charges (write-offs) when the value of an asset declines.

"This round of impairments is not the end of it," Carla Nunes, a managing director at the risk-consulting firm Kroll LLC, told WSJ. "As the crisis continues, we could see more financial fallout, including indirect impact from the conflict."

Businesses affected by Russia's attack on Ukraine span various industries that include banking, retail, restaurants and shipping.

The Securities and Exchange Commission last month told companies that they must disclose Russian-related losses clearly, and that they shouldn't adjust revenue to add back the estimated income that had been lost.

One accounting specialist told WSJ that companies might hold off announcing a write-down until they have a good understanding on how big the loss will be.

"You don't want to put a number out there until you're confident that it's not likely to change," Jack Ciesielski, owner of investment research firm R.G. Associates Inc., told WSJ.

Some companies are writing off assets stuck in Russia. The Irish aircraft leasing company AerCap Holdings NV last month took an accounting charge of $2.7 billion, which included writing off the value of more than 100 of planes remaining in the country.

McDonald's last month said it was selling its restaurants in Russia to one of its local licensees, Alexander Govor. The company's former restaurants will reopen Sunday under new branding and ownership.

Microsoft Corp. last week said it was making substantial cuts to its business in Russia, joining a string of companies that are reducing their exposure or pulling out of the country following its invasion of Ukraine.

Oil giant Exxon took a huge hit as abandoned its Russian operations due to the war, writing down $3.4 billion, the company said in late April.

Material  from The Associated Press and Reuters was used in this report.

© 2022 Newsmax. All rights reserved.


StreetTalk
International companies have lost nearly $60 billion as result of exiting or reducing operations in Russia, The Wall Street Journal reported Friday.
business, losses, russia, write-offs, billion, wsj
410
2022-07-10
Friday, 10 June 2022 09:07 AM
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