The rules of valuation and credibility of the commune balance sheet

State entities, their auxiliary households, state businesses are public finance sector units. They are endowed with specific assets and empowered within certain limits to incur liabilities in order to fulfil their tasks. To appraise the assets, the liabilities and define the performance level the entities are obliged to comply with the measurement categories stemming from the Accounting Act and specific regulations on the accounting principles set forth exclusively for these entities. The problem arises whether the regulations and the measurement method are adequate for the specific nature of the entities' operation and for the reflection of the value of the assets, the income statement, own funds and liabilities in their balance sheet and consequently in the balance sheet of a self-government unit. Does the application of these principles guarantee the achievement of the overriding objective of accounting i.e, providing diligent information about the state of the assets and financial performance of each entity, e.g. a commune. The paper is an attempt at answering the aforementioned questions.