METHODOLOGICAL ASPECTS OF ACCOUNTING FOR CONSTRUCTION AND RENOVATION EXPENDITURES IN BUDGET ORGANIZATIONS: INTERNATIONAL PUBLIC SECTOR EXPERIENCE

Abstract

This research paper analyzes international approaches to accounting for and managing
construction and renovation expenditures in public sector organizations, focusing on the life-cycle costing
of infrastructure assets, the clear differentiation between capital and operating expenditures (CAPEX and
OPEX), digital cost-monitoring platforms, controls over post-tender variations, cost–benefit analysis (CBA),
and value-for-money assessment. The study identifies key practical challenges, including inconsistent criteria
for distinguishing between capital and current repair costs, inconsistencies in depreciation policies, and the
insufficient reflection of social efficiency factors in financial reporting. Based on international accounting
standards (IPSAS 45 and IAS 16), regulatory documents, and international and national scholarly studies, an
Integrated Asset Expenditure Index (IAEI) was developed. The Index incorporates five indicators: the technical
restoration of infrastructure, service efficiency, service-life extension, social benefits, and expenditure efficiency.