diff --git a/CHANGELOG.md b/CHANGELOG.md
index 00eae1c7a..8ae6ff517 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -89,6 +89,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Added signatures for map methods, such as `.get()`, `.exists()`, `.set()`, `.replace()`, `.replaceGet()`, `.del()`, `.isEmpty()`, `.deepEquals()`, `.asCell()`: PR [#1352](https://github.com/tact-lang/tact/pull/1352)
 - Added a compilation-related page with the description of the compilation report: PR [#1309](https://github.com/tact-lang/tact/pull/1309), PR [#1387](https://github.com/tact-lang/tact/pull/1387)
 - Documented `BaseTrait` and methods in stdlib code: PR [#1296](https://github.com/tact-lang/tact/pull/1296)
+- Document how storage variables get updated in relation to the `init()` function: PR [#1311](https://github.com/tact-lang/tact/pull/1311)
 
 ### Release contributors
 
diff --git a/docs/src/content/docs/book/contracts.mdx b/docs/src/content/docs/book/contracts.mdx
index 7aae8237b..7130a39e3 100644
--- a/docs/src/content/docs/book/contracts.mdx
+++ b/docs/src/content/docs/book/contracts.mdx
@@ -137,7 +137,7 @@ In addition to that, [`tact.config.json`](/book/config) may still be used in [Bl
 
 ### Persistent state variables {#variables}
 
-Contracts can define state variables that persist between contract calls. Contracts in TON [pay rent](https://docs.ton.org/develop/smart-contracts/fees#storage-fee) in proportion to the amount of persistent space they consume, so [compact representations via serialization](/book/integers#serialization) are encouraged.
+Contracts can define state variables that persist between contract calls, and thus commonly referred to as _storage_ variables. Contracts in TON [pay rent](https://docs.ton.org/develop/smart-contracts/fees#storage-fee) in proportion to the amount of persistent space they consume, so [compact representations via serialization](/book/integers#serialization) are encouraged.
 
 ```tact
 contract Example {
@@ -149,11 +149,62 @@ contract Example {
 }
 ```
 
-State variables must have a default value or initialized in [`init(){:tact}`](#init-function) function, that runs on deployment of the contract. The only exception is persistent state variables of type [`map<K, V>{:tact}`](/book/maps) since they are initialized empty by default.
+State variables must have a default value or be initialized in the [`init(){:tact}`](#init-function) function that runs once on deployment of the contract. The only exception are persistent state variables of type [`map<K, V>{:tact}`](/book/maps), since they are initialized empty by default.
+
+The default value of state variables is assigned before any values could be assigned in the [`init(){:tact}`](#init-function) function.
+
+```tact
+contract Example {
+    // persistent state variables
+    var1: Int = 0; // initialized with default value 0
+
+    // constructor function
+    init() {
+        self.var1 = 42; // overrides the default to 42
+    }
+}
+```
+
+As the contract state is updated at the very end of the [compute phase][compute] of the transaction, intermediate assignments of [`Int{:tact}`][int] values that exceed the limits specified by [serialization formats](/book/integers#serialization) won't fail immediately. Instead, such assignments would cause an [exit code 5](/book/exit-codes#5) only after all statements have been executed.
+
+This is to be expected because the integers in the temporary [TVM][tvm] memory, which is used to process the [compute phase][compute], always have $257$ bits and are capable of holding values in the inclusive range from $-2^{256}$ to $2^{256} - 1.$
+
+```tact
+contract DeRanged {
+    // Persistent state variables
+    var: Int as uint8; // cannot store values outside the 0-255 range
+
+    init() {
+        self.var = -1;  // this won't fail immediately
+        self.var = 500; // and that won't fail right away either
+
+    } // only here, at the end of the compute phase,
+      // would there be an error thrown with an exit code 5: Integer out of range
+}
+```
+
+In the end, this means that you cannot rely on intermediate out-of-bounds checks, because there are none at [TVM][tvm] runtime, and only the last assignment of each state variable is used to update its persistent state value.
+
+```tact
+contract Zero {
+    // Persistent state variables
+    var: Int as uint8; // cannot store values outside the 0-255 range
+    var2: Int as uint4; // cannot store values outside the 0-15 range
+
+    init() {
+        self.var = -1; // this won't fail
+        self.var = 0;  // and this is in the range of `uint8`
+
+        self.var2 = -1; // this won't fail
+        self.var2 = 15; // and this is in the range of `uint4`
+
+    } // no errors, and now `self.var` is 0 and `self.var2` is 15
+}
+```
 
 :::note
 
-  Note, that Tact supports local, non-persistent-state variables too, see: [Variable declaration](/book/statements#let).
+  Tact supports local, non-persistent-state variables too, see: [Variable declaration](/book/statements#let).
 
 :::
 
@@ -203,10 +254,12 @@ contract Example {
     // persistent state variables
     var1: Int = 0; // initialized with default value 0
     var2: Int;     // must be initialized in the init() function
+    var3: Int = 7; // initialized with default value 7
 
     // constructor function
     init() {
         self.var2 = 42;
+        self.var3 = 32; // overrides the default to 32
     }
 }
 ```
@@ -354,7 +407,10 @@ contract Functions {
 :::
 
 [p]: /book/types#primitive-types
+[int]: /book/integers
 [trait]: /book/types#traits
 
+[compute]: https://docs.ton.org/learn/tvm-instructions/tvm-overview#compute-phase
+[tvm]: https://docs.ton.org/learn/tvm-instructions/tvm-overview
 [bp]: https://github.com/ton-org/blueprint
 [bp-config]: https://github.com/ton-org/blueprint/tree/main?tab=readme-ov-file#configuration
diff --git a/docs/src/content/docs/book/integers.mdx b/docs/src/content/docs/book/integers.mdx
index 2109ebfc4..55a5c11ed 100644
--- a/docs/src/content/docs/book/integers.mdx
+++ b/docs/src/content/docs/book/integers.mdx
@@ -89,6 +89,14 @@ Motivation is very simple:
 * Storing $1000$ $257$-bit integers in state [costs](https://docs.ton.org/develop/smart-contracts/fees#how-to-calculate-fees) about $0.184$ TON per year.
 * Storing $1000$ $32$-bit integers only costs $0.023$ TON per year by comparison.
 
+:::note
+
+  Serialization limits apply only to the contract state between transactions and are **not** imposed on the temporary [TVM][tvm] memory, which operates only on $257$-bit integers.
+
+  Attempts to assign out-of-bounds values will result in [exit code 5](/book/exit-codes#5) being thrown at the very end of the [compute phase](https://docs.ton.org/learn/tvm-instructions/tvm-overview#compute-phase): `Integer out of range`.
+
+:::
+
 ### Common serialization types
 
 Name             | [TL-B][tlb]                 | Inclusive range             | Space taken
@@ -195,6 +203,7 @@ Here, `oneByte` is serialized as a [`uint8`](#common-serialization-types), which
   Therefore, be **very** careful with numbers and always double-check calculations when using serialization.
 :::
 
+[tvm]: https://docs.ton.org/learn/tvm-instructions/tvm-overview
 [tlb]: https://docs.ton.org/develop/data-formats/tl-b-language
 [tlb-builtin]: https://docs.ton.org/develop/data-formats/tl-b-language#built-in-types
 [varuint]: https://docs.ton.org/develop/data-formats/msg-tlb#varuinteger-n