SUSTAINABILITY OF THE ALOGICAL APPROACH IN THE REGULATORY FRAMEWORK OF PUBLIC SECTOR ACCOUNTING IN BULGARIA

Abstract

Background: The transition to sustainable reporting in the public sector in Bulgaria requires a principle-based approach to the recognition, accounting treatment, and disclosure of assets and liabilities that determine the financial position of public sector entities, as well as contingent assets and liabilities. Aims: This paper critically analyses the regulatory framework of public sector accounting and its impact on the choice of an applicable model for the recognition of non-current assets, as well as on the accounting treatment and disclosure models for contingent assets and liabilities. Methods: A theoretical analysis of the regulatory framework of public sector accounting in the Republic of Bulgaria, focusing on its application to the accounting treatment and disclosure of contingent assets and liabilities, and an empirical comparative study of current accounting practices in selected Bulgarian museums. Results: The study identifies key differences compared to the conceptual model of public sector financial reporting. Conclusions: The lack of timely and complete accounting information on contingent liabilities may lead to an underestimation of entities’ future financial commitments, which in turn affects their capacity for sustainable development and raises doubts regarding the going concern assumption. Implications: It also outlines the implications and challenges facing the public sector accounting system in Bulgaria in relation to the application of sustainable financial reporting models.