In 2022, we completed a unique project – valuation of the cost of maintenance services for oil and gas shut-off valves on a subscription basis. The object of the valuation was services, that is, it was not the equipment itself that was valued, but services for routine maintenance and unscheduled repairs. At the same time, the services were provided not according to actual requests, but according to a subscription service agreement.
We had to figure out the system of scheduled preventive repairs, take into account the frequency of various types of maintenance work required by the manufacturer, inspections, gasket replacements, adjustments, as well as more complex repairs. In addition, take into account the costs of visiting specialists at the location of this property and take into account unscheduled work, which may also occur due to sudden equipment failures.
When valuing, it was necessary to take into account historical statistics on breakdowns of this class of imported equipment, which was supplied and installed for the operation of one of the largest Russian oil and gas companies in the Volga Federal District. The number of this equipment is in the thousands. For its proper maintenance, a subsidiary of the manufacturer has been established with a repair base, with the necessary stands and tools and a staff of qualified specialists.
The services provided under such an agreement, as well as a number of other agreements with other buyers of equipment, are the company's main activity and main source of income. The services provided are not typical - they are provided based on the composition of the equipment fleet and its location. Accordingly, the cost of such services cannot be determined by direct comparison with prices for similar services. Therefore, confirmation of market conditions under such contracts is critically important to protect both the service company and its customers from tax risks.
We implemented this project in partnership with Nextons (ex–Dentons), one of the leading international law firms with the best practice in tax and customs disputes in the Russian Federation.