The development of accounting for public sector entities and its convergence with public sector IFRS pose new methodical and methodological problems. Inventory is essential to ensure faithful representation of financial reports provided to users. This confirms the relevance of the study. The article contains a theoretical study of inventory in the context of implementation of federal standards for accounting in public finance. The paper studies the relationship of inventory with other elements of the accounting method as well as accounting procedures: recognition, classification, evaluation, adjustment of estimates, presentation and disclosure of information in financial reports, and confirmation of reporting reliability made by an independent entity. In addition, the study has established the effect of inventory on the achievement of qualitative characteristics of financial reports to increase its usefulness to users. Since information requests by users change under the influence of external and internal environmental conditions, an inventory should confirm not only the recognition and classification of the object, but also its estimate. It is concluded that it is advisable to disclose information on the valuation of objects in financial statements at both actual and fair values. This would ensure the control function of accounting and strengthen its information function. The results obtained by the author can be used for further development of regulation of accounting in public finance.