Classification of property and ownership rights in agribusiness

Property is any material object possessing utility, and the rights to them, i.e., those in someone's ownership, belonging to someone. As a legal category, property expresses relations regarding the right of ownership. Property right represents the subjective right of the participants in legal relations, associated with the possession, use, and disposal of property.

These three powers regarding property are interconnected, collectively constituting the legal content of the right of ownership of property and expressing the following:

• right of possession — the primary power of the owner, which consists of the actual holding of the property, while the possibility of such holding is legally ensured;
• right of use of property — a legally based possibility of exploiting property and extracting benefits or receiving income. The right of use of such specific and valuable property as agricultural land means its application for its intended purpose. Possession and use may either be combined in the hands of the same subject or separated between different subjects;
• right of disposal of property — a possibility granted by law to the owner to perform, at their discretion and in their own interests, actions that determine the "legal destiny" of various elements or all of the property belonging to them, and to carry out various transactions with it, such as pledging, leasing, or selling.

The main type of property classification is the division into movable and immovable.

Immovable property is characterized by a firm connection to the land, its immobility, and is defined as a physical plot of land and human-made improvements related to it, including structures, as well as objects firmly connected to it — buildings, constructions, enclosed bodies of water, forests, perennial plantings, etc. Moving these property objects is impossible without disproportionate damage.

Based on the origin, immovable property is divided into natural objects and artificial ones created by humans; according to the purpose of use — into housing, warehouse premises, and land development.

Article 130 of the Civil Code of the Russian Federation establishes what should be classified as immovable property. The main component of immovable property is land. In accordance with the specified article, concepts such as "immovable property," "immovable things," and "real estate" can be used as synonyms. However, it is necessary to distinguish between a specific subject — the state, legal entities, or individuals.

State ownership is property belonging by right of ownership to the Russian Federation (federal ownership), and property belonging by right of ownership to the constituent entities of the Russian Federation (republics, krais, oblasts, autonomous entities, etc.).

A citizen's property belongs to them, is created, and increases at the expense of their income. Ownership of property can be:

• common — ownership of several persons in the same property;
• joint — without the determination of shares;
• shared — a variety of common, but implying the presence of a share in the right to common property for each of the owners.

Private ownership expresses the right of an individual or a legal entity to specific movable and immovable property, i.e., a private owner can independently exercise possession, use, and disposal of their property at their discretion. A variety of private ownership is family ownership.

An enterprise as a whole, according to Art. 130 of the Civil Code of the Russian Federation, is recognized as real estate, acting as a property complex, including land plots, buildings and structures, equipment and inventory, products and raw materials, claims, debts, and rights of designation. Thus, property is only a part of the enterprise's property complex, and every enterprise is a property complex regardless of whether it is formed as a legal entity or not, for example, a peasant (farm) enterprise.

Property requires the owner to incur expenses for its maintenance, preservation, augmentation, and efficient use.

Valuation of property, particularly real estate, is a mandatory condition preceding such transactions with it in the real estate market as purchase and sale, leasing, and pledging. The results of valuation are used during:

• insurance;
• taxation;
• restructuring;
• investing;
• bankruptcy;
• inheritance;
• redistribution of ownership;
• allocation of a share from common property.

Property is an important object of management (land plots, housing, commercial real estate, property complexes of enterprises, etc.). Its valuation is a function of the real estate management system. Mandatory valuation is carried out in the following cases:

• when transferring objects of immovable property into the ownership of constituent entities of the Russian Federation or municipal ownership;
• during the redemption or other seizures of immovable property from its owner for state or municipal needs;
• when transferring state property into trust management or in the case of privatization;
• when implementing investment projects with the involvement of budget funds.

Immovable property is a component of fixed assets without their movable elements. Real estate includes land; its value is accounted for in the fixed assets of an enterprise's balance sheet asset.

Valuation of real estate acts as an important tool for state economic regulation and a financial benchmark for agribusiness owners. The main goal of such work is for valuation experts to determine the probable monetary amount that can be obtained under specific market conditions when transferring property rights to an object. An accurate calculation is necessary for any operations involving production bases, storage facilities, livestock complexes, and land plots.

Three main approaches to agricultural real estate valuation

To establish the possible market value of a specific object, specialists use three valuation methods. Each methodology relies on its own economic logic and considers different factors of property operation. The choice of approach depends on the nature of the object, the availability of data on sales of analogs, and its ability to generate profit.

• Cost approach: the market value is estimated based on the costs of acquiring a land plot and the costs of constructing a similar building or structure. When calculating the final sum, appraisers mandatorily take into account the depreciation of the evaluated object.
• Comparative approach: the value is established by comparing recent market sales of comparable objects with the one being evaluated.
• Income approach: the calculation consists of capitalizing the income generated by the real estate object.