ACCOUNTING FOR INVENTORY REVALUATION IN BUDGETARY INSTITUTIONS UNDER CONDITIONS OF INFLATIONARY PROCESSES AND MARTIAL LAW

Abstract

The article examines the theoretical, methodological, and practical aspects of inventory revaluation accounting in budgetary institutions under martial law and inflationary instability. It is substantiated that rapid price growth, disruptions in logistics chains, shortages of certain material resources, and the instability of the economic environment significantly affect the reliability of inventory valuation in the public sector. It is determined that the historical cost of inventories quickly loses its relevance under current conditions, leading to distortions in financial reporting indicators and complicating effective managerial decision-making in budgetary institutions. The economic essence of inventory revaluation is disclosed as a tool for restoring the previously reduced value of assets in accordance with the requirements of NPSAS 123 “Inventories.” It is proven that revaluation has a limited nature and is applied only in cases where the net realizable value or useful potential of inventories increases after their write-down. The study emphasizes that inventory revaluation contributes to aligning the carrying value of inventories with their fair value, ensuring an objective presentation of assets in accounting and financial reporting of budgetary institutions. Special attention is devoted to the practical aspects of documentary support and accounting treatment of inventory revaluation results. The study proposes a procedure for organizing the revaluation process, which includes issuing an order by the institution’s management, establishing a commission, analyzing market prices. As a result of the study, it is concluded that improving methodological approaches to inventory revaluation accounting is an important prerequisite for ensuring the financial stability of budgetary institutions, increasing transparency in the use of budget funds, and adapting the public sector accounting system to current economic realities. The proposed recommendations may be applied in the practical activities of budgetary institutions to improve the quality of accounting information and the effectiveness of managerial decision-making.