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The Supreme Court has reduced the valuation of the architectural monument by 64 million

The Supreme Court has reduced the valuation of the architectural monument by 64 million

Katerina Melnychenko Deputy Editor-in-Chief

07 July 2026, 10:00

The Supreme Court has reduced the valuation of the architectural monument by 64 million — A monument of architecture and history of local significance — the Main Building of the Mykolaiv Artillery School (Kyiv, 28 Air Force Avenue, building 1A)

The Audit Office has identified a significant misstatement in the Supreme Court’s financial statements due to the recognition of depreciation on a cultural heritage site.

This is stated in the report on the results of the financial audit of the Supreme Court, approved by Decision No. 19-2 of the Accounting Chamber dated 23 June 2026.

According to the auditors’ findings, as at 31 December 2025, the value of the Supreme Court’s non-current tangible assets was understated by 64.6 million hryvnias. The bulk of this amount — 64.5 million hryvnias — relates to the depreciation charged on a cultural heritage site of local significance, which, under public sector accounting rules, is not subject to depreciation.

Which building is in question?

The Audit Office’s report refers to the fixed asset ‘Building, No. 1A’ at 28 Povitryanikh Sil Avenue in Kyiv. The auditors noted that this is a historical monument of local significance.

The property was included in the list of historical monuments of local significance by Decision No. 159 of the Executive Committee of the Kyiv City Council of Workers’ Deputies dated 27 January 1970. Furthermore, in 2018, a conservation agreement for this monument was concluded between the Supreme Court and the Department of Cultural Heritage Protection of the Kyiv City State Administration.

Architectural and historical monument of local significance — Main Building of the Mykolaiv Artillery School (Kyiv, 28 Air Force Avenue, building 1A)

This monumental three-storey U-shaped building, constructed of unplastered yellow brick, was erected between 1914 and 1917 on the grounds of the Cadet Grove, based on a design by civil engineer Dmytro Zaitsev. The architecture of the complex is in the late Art Nouveau style with elements of Neoclassicism: the strict symmetry of the main façade is emphasised by massive risalits, pilasters and rustication on the ground floor, reflecting the building’s military-administrative purpose. The school was built to train artillery officers during the First World War, and during the Soviet period it housed the renowned Kirov Higher Artillery Engineering School (KVAIS). The building has fully retained its historical layout and is now a listed building, forming an important part of the architectural landscape of the Solomyanskyi district. Currently, the premises of this restored historic building (No. 1A) are shared between the Civil Court of Cassation, which forms part of the Supreme Court, and the National Defence University of Ukraine.

What is the nature of the breach?

According to National Accounting Regulation No. 121 for the Public Sector, ‘Fixed Assets’, cultural heritage sites of national or local significance that are included or are subject to inclusion in the State Register of Immovable Monuments of Ukraine are not subject to depreciation.

Despite this, the Supreme Court calculated depreciation on the building on Air Force Avenue. According to the auditors’ findings, this is precisely what led to the book value of fixed assets being understated.

In the financial statements, this was reflected as an overstatement of accumulated depreciation and an understatement of the financial result. At the start of the reporting period, the figure was understated by 54.8 million UAH, and at the end of the year — by 64.5 million UAH.

How much was accrued in 2025 alone

Separately, the Accounting Chamber established that in 2025 alone, UAH 9.7 million in depreciation was charged to this asset. Consequently, the financial results report overstated expenditure on the implementation of budgetary programmes and understated the surplus or deficit for the reporting period.

The auditors also pointed out that in the statement of equity, the financial result was understated by 64.5 million hryvnias at the end of the year.

Why this is important

The Accounting Chamber emphasised that the defining characteristic of cultural heritage sites is their cultural value. No useful life is established for such properties in the sense that applies to ordinary real estate; therefore, no depreciation is charged on them.

At the same time, the auditors noted that the Supreme Court’s accounts include two further cultural heritage sites — one of national significance and the other of local significance. The Supreme Court did not charge depreciation on these. The Accounting Chamber concluded that this indicates a lack of a consistent approach to the accounting treatment of such properties.

What the Supreme Court should do

The Audit Office has recommended that the Supreme Court, by 1 October 2026, adopt a management decision regarding the depreciation charged on the building on Air Force Avenue, 28, taking into account the requirements of the accounting standard.

The auditors also recommended establishing the procedure and criteria for determining the net realisable value of fixed assets and ensuring separate accounting for buildings that have different statuses and require different approaches to depreciation.

Overall, the financial audit identified discrepancies in the Supreme Court’s financial statements amounting to 67.8 million UAH, and in its budgetary statements — 3.1 million UAH. Furthermore, due to regulatory inconsistencies, the financial statements did not include information regarding the transfer of 75.6 million hryvnias to the accounts of the recipient — the state-owned enterprise ‘DEO’, which falls under the jurisdiction of the Supreme Court.

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