ASSESSMENT OF BORROWING AUTONOMY OF RURAL MUNICIPALITIES UNDER IPSAS 5

Abstract

The article analyses the borrowing autonomy level of rural municipalities in the Panevėžys region – Rokiškis, Kupiškis, Biržai, Pasvalys and Panevėžys district municipalities – according to the principles of the international standard IPSAS 5. The aim is to determine how IPSAS 5 principles are related to municipal borrowing policy and what influence they have on their autonomy. The analysis applies liability indicators – the debt level (ĮL) and the share of long-term liabilities (IĮD) – as well as revenue indicators: own revenue level (WDWM), financial autonomy (WSFD), fiscal asset index (WBF) and personal income per capita (PIT), assessing the financial condition of municipalities in 2021–2024. The research results showed that the structure of liabilities of these municipalities is sustainable and stable, and the level of debt is low. The application of IPSAS 5 provisions in borrowing policy ensures transparent recognition of liabilities, accurate debt accounting and responsible implementation of fiscal discipline. All analysed municipalities follow a sustainable borrowing policy, and their financial autonomy depends on generated revenues, limited and justified borrowing, and effective application of IPSAS 5 provisions in financial management. The assessment of municipal borrowing autonomy is relevant in ensuring the sustainability of public sector finances and the responsible implementation of fiscal discipline at the regional level. The study reveals the interrelationships between borrowing, revenue structure, and financial autonomy.