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1Khakhonova N.N.,
Doctor of economic sciences, professor of department of record-keeping, Rostov State University of Economics
ACTUAL PROBLEMS OF DISCLOSURE OF INFORMATION IN THE
MANAGEMENT REPORTING
АКТУАЛЬНЫЕ ПРОБЛЕМЫ РАСКРЫТИЯ ИНФОРМАЦИИ В УПРАВЛЕНЧЕСКОЙ ОТЧЕТНОСТИ
Хахонова Н.Н., д.э.н., профессор кафедры бухгалтерского учета, Ростовский государственный экономический университет (РИНХ)
АННОТАЦИЯ
Для успешного функционирования организаций в условиях мирового финансового кризиса, от них требуется повышение эффективности финансово-хозяйственной деятельности на основе совершенствования управления производством, создания конкурентоспособной продукции и привлечения инвестиций. Чтобы обеспечить реализацию этих задач управленческий персонал должен быть обеспечен качественной информацией, которая лежит в основе принятия обоснованных управленческих решений. Для этого подсистема бухгалтерского управленческого учета формирует свой продукт - бухгалтерскую управленческую отчетность. В настоящее время уделяется незначительное внимание вопросам развития теории и практического применения системы бухгалтерской управленческой отчетности. В статье сделан главный акцент на то, что информация управленческой отчетности служит основой для принятия решений менеджментом организации.
ABSTRACT
For the successful functioning of organizations in the global financial crisis, they are required to increase the efficiency of financial and economic activity through improved management of production, creation of competitive products and attraction of investment. To ensure the realization of these objectives management staff should be provided with quality information, which is the basis for making informed management decisions. For this sub-system of accounting management accounting forms its own product - an accounting management reporting. Currently, there is not enough attention paid to the development of theory and practical application of financial management reporting system. The article presents the fact that information management reporting provides the basis for management decision-making organization is emphasized.
Ключевые слова: внутренняя бухгалтерская отчетность, управленческий учет, управленческие решения, контроль, учетно-аналитическая информация.
Keywords/internal accounting, management accounting, management decisions, monitoring, accounting and analytical information
To regulate the process of preparation of management reports in internal provisions for its formation the data sources for each reporting indicator up to indication of those bookkeeping accounts, which shall contain necessary accounting data, are specified. So a request or an application for the accounting information about property, liabilities and business processes required by management services is formed, it will help to determine its level of detail at analytical accounts. A request for planned, normative, financial and other information useful for management accounting is formed in the same way.
For example, a process of formation of management reports on costs of production of goods (works, services), which shall include the information required for cost management, determination of reserves for the reduction of costs and making of effective management decisions for the use of reserves. For this purpose the data sources for the calculation of each indicator characterizing costs of production and cost price of goods (works, services) are specified.
Cost management requires both generalizing data on cost priceof goods (works, services) for the company on the whole and detailed data on costs of their production by: elements of costs; places of their origin (production departments of the company); types of goods (works, services); items of cost price of goods (works, services); types of materials used and forms of payment for labour; norms and deviations from norms of costs; centers of responsibility for deviations from norms; factors and causes of deviations from norms.
Information on costs by elements is formed for the company on the whole with the separation of economically homogeneous types of costs regardless of their role in the production process and places of origin. Material costs, labour costs, social security contributions, depreciation, and other costs are separated as
economic elements.
Information on costs by economic elements is received through classifica-tion of costs by economic elements in accounting registers by cost accounts (20 "Main production", 44 "Sales costs", etc.). At present such classification is made non-systemically without correspondence of bookkeeping accounts and it does not provide the required precision of accounting indicators. To receive the information on costs by economic elements in the system of bookkeeping accountsthe transit account "Production costs by economic elements" suggested by professor A.A. Dodonov may be used. On the debit side of this account the costs by main types of activity are classified by economic elements (at the corresponding subaccounts or analytical accounts) and they are written off from the credit of the account to the corresponding cost accounts (20 "Main production", 25 "General production costs", 26 "General business costs", 44 "Sales costs", etc.).
In management reports actual costs by economic elements are given in comparison with costs by budget. Since absolute sums of actual and budgeted costs are not comparable (due to differences in the actual and planned volume and range of goods, works, services) the data on the percentage of separate elements of costs in their general sum are also given in management reports. They are used for evaluation of the structure of costs, determination of significance of separate types of costs, and determination of priority areas of their reduction.
To characterize the level of profitability (or unprofitability) of production management reports may include the data on the planned and actual costs per a ruble of goods (works, services) for the company on the whole, its structural subdivisions, types and segments of economic activity.
Evaluation of work results of production departments of the company (workshops, branches, etc.) requires the detailed data on costs of each subdivision spent on production of separate orders, types of goods (works, services) to be given in management reports by calculation items of costs. The list of items of costs is specified in branch instructions for planning, account and calculation of cost price of goods (works, services) and depends on the type of economic activity, nature of goods (works, services), technology and organization of its production.
The procedure of provision of such information will differ in the companies using a traditional system of production process accounting and in the companies using a Direct-costing system.
In the traditional system of accounting the production cost price of goods (works, services) is formed by the following cost items: materials (with the deduction of return costs); fuel and energy for technological purposes; basic salaries of production workers; extra salaries of production workers;social security contributions; pre-production and start-up costs; general production costs; waste losses; general business costs; other production costs.
Sales costs are specified as a separate cost item; together with the production cost price they form a full cost price of goods (works, services).
A company may specify costs of purchased semi-finished products and services of special organizations, equipment maintenance and operation costs, other costs, which take a significant share in production costs,as separate cost items of production cost price.
Classification of costs by items of cost price of goods (works, services), based on their division depending onplaces of origin of costs and their role in the production process, provides the separation of costs related to technological process, to pre-production and start-up for new types of goods (works, services), to production management and maintenance. This classification makes it possible to trace back the process of costing in places of origin, to evaluate the structure of cost price from the point of view of economic role of separate items.
Material costs take a considerable share in the cost price of goods (works, services). To validate management decisions on the decrease and increase of efficiency of material resources use the data on actual costs by separate types of materials for the production of the most important types of goods (works, services) are given in reports in comparison with the costs by norms. Considerable deviations from norms are classified by centers of responsibility for these deviations as well as by factors and causes of deviations that is necessary for control and
evaluation of efficiency of costs spent on these purposes. Costs of separate types of fuel and energy for technological purposes are given in management reports in the same way.
Costs of labour of production workers are given in management reports also by types of goods (works, services) and by forms of payment for labour, at the same time actual costs are compared to costs by norms and deviations from norms are classified in a usual way (by centers of responsibility, factors and causes of deviations).
Data on pre-production and start-upcosts are given in reports by types of goods (works, services), on the start-up of which the costs were spent. At the same time actual costs are divided into costs by budget and deviations from budget and the determined deviations from budget are classified in a usual way. Moreover, reports include the data on the compliance with the planned terms of implementation of measures forpre-production and start-up of separate types of goods (works, services).
General production costs of each structural subdivision of the company are given in management reports in comparison with costs by budget indicating the causes of deviations from the budget and the personsresponsible for them.
Waste losses as non-production costs which raise the cost price of goods (works, services) require the detailed and comprehensive information necessary to validate management decisions on elimination of causes of rejection. Management reports include costs of final and recoverablerejects by structural subdivisions and types of goods (works, services), value of finally rejectedgoods by the price of possible use, sums of charges from the persons responsible for rejection, causes of rejection (use of low-quality materials, low qualification of workers, etc.).
The information necessary for control and evaluation of efficiency of costs of company management is given in reports comparing actual costs by each item of general business costs to costs by budget and classifying deviations from the budget by their causes. Large companies may specify these costs and give them in reports by responsibility centers (departments or management services).
Sales costs are specified by their items, regions and types of sales, subdivisions which sell the goods, types of goods, works or services. Actual costs are given in reports in comparison with costs by budget and deviations from budgets are classified in a usual way.
A model list of indicators of management reports necessary for cost management in the companies using a traditional system of production process accounting and sources of information for the calculation of indicators are given in table 1.
Table 1
Indicators of cost price of goods (works, services) and sources of infor-mation for their calculation
No. Management reportsindicator name Source of information for the calculation of indicators
1 Structure of costs of production of goods (works, services) by economic elements (by budget and by report) Cost budget and registers of production costs
2 Costs per a ruble of goods (works, services) for the company on the whole, its structural subdivisions, segments of activity and types of goods and works (they are determined as a ratio of cost price of sold goods, works, services to net sales) Data of registers of synthetic and analytical accounting as per account 90 "Sales" on actual cost price of sold products (goods, works, services) andnet sales
3 Deviation of actual cost price of separate types of goods (works, services) from their planned cost price by cost items Accounting and planned calculations of cost price of separate types of goods (works, services)
4 Deviation of actual material costs (by types of materials) of production of separate types of goods (works, ser-vices) from costs by norms, classification of deviations by their causes and responsibility centers Reports on the use of raw materials, materials, purchased semi-finished products, norms of material costs
5 Deviation of actual costs of fuel and energy for technological purposes (by types of fuel and energy) used in the production of separate types of goods (works, services) from costs by norms, classification of deviations by their causes and responsibility centers Reports on the use of fuel and energy for technological pur-poses, norms of fuel and energy consumption
6 Deviation of actual costs of labour of the main production workers from costs by norms (by types of goods, works, services), classification of deviations by their causes and responsibility centers Reports on costs of labour, cost norms
7 Deviation of actual pre-production and start-up costsof separate types of goods (works, services) from costs by norms, classification of deviations by their causes and responsibility centers Registers of analytical accounting of pre-production and start-up costs, cost budgets
8 Compliance with the planned terms of implementation of measures of pre-production and start-upfor separate types of goods (works, services) Data of operating and technical accounting of terms of implementation of measures
9 Deviation of actual general production costs of each structural subdivision of the company by cost items from costs by budgets, classification of deviations by their causes and responsibility centers Registers of analytical accounting of general production costs, cost budgets
10 Value of losses from final and recoverable rejects, their share in the production cost price of separate types of goods (works, services) Report calculations of cost price of separate types of goods (works, services)
11 Value of finally rejected goods and costs of recover of rejects in structural subdivisions of the company Basic documents (reject charts or reject statements, etc.)
12 Classification of costs of final and recoverable rejects by their causes and responsibility centers Basic documents (reject charts or reject statements, etc.)
13 Level of compensation of costs of final and recoverable rejects (due to accounting of finally rejected goods at the price of possible use, charges from the persons responsible for rejects, etc.) Registers of analytical accounting of waste losses, basic documents
14 Deviation of actual general business costs by cost items from costs by budgets, classification of deviations by their causes and responsibility centers Registers of analytical accounting of general business costs, cost budget
15 Deviation of actual sales costs by re-gions and types of sales, subdivisions selling the goods, types of goods (works, services) and cost items from costs by budgets, classification of deviations by their causes and responsibility centers Registers of analytical accounting of sales costs
As it follows from the table 1 to manage costs of production and sales of goods (works, services) the planned, budgetary, normative and accounting information is required as well as the data of operating and technical accounting. Basic documents, reports on the use of resources, registers of analytical and synthetic accounting, accounting calculations, etc. act as sources
of accounting information. The sources of information given in the table 1 are considered as a request from management services for the data useful to manage the cost price of goods (works, services). In accordance with this request a specification of production costs is provided by all major areas (steps of analytical accounting): places of origin of costs; types of goods
(works, services); cost price items; types of materials and forms of payment for labour; norms and deviations from norms; centers of responsibility for deviations; factors and causes of deviations. The indicators of plans, budgets, norms and standards shall be specified according to the same areas.
Companies using the Direct-costing system divide production costs to constant and variable with the account of their dependence on the volume of goods (works, services). Constant costs practically do not change with the increase or decrease of volume of manufactured goods, performed works (services) and variable costs increase with the increase of production volume and decrease with its reduction.
Variable costs are costs of raw materials, materials, purchased semi-finished products and components, fuel and energy for technological purposes, salaries of the main production workers with social security contributions, etc. Constant cost are depreciation of fixed assets, rental payments, leasing payments, salaries of management staff with social security contributions and other similar costs.
The advantage of the Direct-costing system as compared with the traditional accounting of cost price is the formation of information necessary to study the dependence of the financial result from sales of goods (works, services) from the factors, which have impact on it. The information formed in the Direct-costing system allows determining the breakeven point (critical sales volume by which constant and variable costs are covered by the gain from sales of goods, works, services) and controlling the financial result seeking to obtain the planned profit by means of regulation of the volume and range of sales, sale prices, constant and variable costs.
Companies using the Direct-costing system include only variable costs into cost price of goods (works, services). Constant costs are written off immediately to the financial result passing production cost accounts.
Variable costs (materials, fuel and energy for technological purposes, salaries of the main production workers, etc.) are given in management reports by separate types of goods (works, services) in comparison with cost norms. Constant costsare given in reports by places of their origin and cost itemsin comparison with costs by budgets. Management reports include the results of classification of deviations by their causes and responsibility centersto provide management staff with the data on deviation of actual costs from costs by norms or budgets useful to validate management decisions on elimination of negative effects in the company production activity.
Different methods (economic and mathematical, statistical, expert evaluation methods) are used to separate variable and
constant costs from the general amount of costs, they allow determining the correlation between costs and production volume under certain conditions of business activity of the company. The subject matter of these methods is substantially dealt with in economic literature.
The only difference in the way of formation of information on cost price of goods (works, services) in the Direct-costing system from the traditional system of the production process accounting is the necessity to study the correlation between separate items of costs and production volume. However, solution of this problem requires choosing and applying appropriate methods of study of this correlation and goes beyond the scope of the accounting process.
Thus, with any system of production process accounting all accounting information useful to manage the cost price of goods (works, services) may be formed within the framework of accounting.
Formation of all accounting information required by management services in accounting is possible even without separation of an independent subsystem of management accounting, but there is an indispensable condition that accounting shall include complete and reliable information on the company activity.
Unfortunately, the theory of management accounting is given in economic literature out of reality and the practice of division of accounting into subsystems of financial and management accounting, which was formed under the actual conditions of the Russian business, is not discussed. Suppressionin management accounting studies of the real causes of its isolated existence,while all accounting information useful for management may be formed within the framework of the unified accounting, reduces the importance of scientific developments and does not conduce to their orientation to overcome the faulty practice of accounting.
References
1. Breslavtseva N.A. Upravlencheskiy uchet. [Management Accounting. Management Reporting: Classification, Identification and Imperatives]. 2010. No1.
2. Druri K. Upravlencheskiy uchet dlya biznes resheniy: [Management Accounting for Business Decisions: Translated from English]. Moscow: YUNITI-DANA, 2003, p. 655.
3. Khakhonova, N (ed.) 2014, The conception of formation of accounting analytical support of business entities management in Russia, CD-ROM, B&M Publishing, San Francisco, California, USA - 149 p. - PQN 500
