ACCOUNTING AND REPORTING PROBLEMS IN WARTIME

Abstract

The full-scale armed aggression of the Russian Federation and the conduct of hostilities on Ukrainian territory have caused significant negative disruptions across the national economy, creating profound demographic, economic, and social challenges. Businesses are forced to seek alternative operational models to ensure continuity amid constant air raids, shelling, temporary occupation, and infrastructure destruction. Consequently, unique financial events and operations arise that are atypical for traditional peacetime accounting, requiring specialized approaches for their reliable reflection in financial reporting. This article examines the theoretical and practical aspects of accounting for wartime consequences and develops structured proposals for enhancing reporting frameworks.
This study aims to identify current challenges related to asset accounting and proper data disclosure under wartime conditions. Specifically, the research analyzes financial statement preparation under the going concern principle, asset valuation in occupied territories, pervasive uncertainty, wartime inventory assessment, asset write-offs, and depreciation accruals caused by military actions. Furthermore, it addresses the documentation of war-related damages for filing future claims in international courts. To resolve these systemic issues, the article proposes distinguishing the non-operating activities of an enterprise by separately reflecting military-induced expenses–such as losses from property destruction or asset impairment in temporarily occupied areas–and income from subsequent compensation, including the restoration of control over property in liberated territories.