Segmental reporting. What is segmental reporting of an organization? Composition of such documentation

The article will touch upon the main issues related to the segmental type of reporting. What kind of document is this, why is it needed, how to draw it up - further.

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Some organizations are required to include information for each segment in their annual reports. It is necessary to have an idea of who is required to prepare such documentation and how.

Basic Aspects

In the course of their activities, organizations carry out various operations and make decisions. These actions are reflected in accounting, on the basis of which financial statements are prepared.

The following information must be indicated in each part of the reporting:

reporting date or period;
name of the organization and its legal form, code;
in what units are the coefficients measured?
address.

Conditions for reporting:

the organization maintains consolidated financial statements;
the enterprise carries out different types of activities;
activities are carried out in different regions.

There are several types of segments: operational and geographic. The first includes that part of the activity that is related to a specific product or service, the provision of specific work.

Geographic segment - performance of work and provision of services in a specific region of activity of an enterprise that is exposed to risk or income in other regions.

IFRS stipulates that this type of reporting should be provided by those organizations whose equity securities are easily traded on the market.

Information from segmental reporting allows you to understand the effectiveness of business areas. During the formation of segmental reporting, primary and secondary types of information are distinguished.

The first includes:

total revenue;
financial result – income or loss;
total assets;
commitment indicators;
amount of capital and investments;
total share of profit and loss.

The following indicators must be indicated in secondary information:

sales revenue;
asset value;
the amount of capital investment.

Segment income includes:

results of unforeseen situations;
interest income;
investments;
revenue from sales.

Segment information is prepared on the basis of the enterprise's accounting policies. In this case, you must indicate:

a list of segments for which information is submitted to the accounting department for reporting;
dividing them into primary and secondary;
How expenses, income and assets are distributed between segments.

Several segments can be combined into one, provided that:

the purpose of the goods or services is the same;
The principle of product development is similar;
the customers are the same;
products are sold in the same way;
the tax regime is the same.

A segment is reportable in the following cases:

If the ratio is below 10%, then the segment can be accepted as reporting if it contains the necessary information.

What information is disclosed:

general information;
reporting segment ratios;
how the indicators were assessed;
comparison of general standards with the values of financial statement items.

The frequency of documentation and the amount of provision depends on the organization.

When making this decision, the governing bodies of the enterprise use the principle of economy - the costs of reporting by segments should not be higher than the economic effect of its application.

Segmental reporting must contain data on deviations from the indicators that were planned to be obtained.

To highlight information, you need to consider:

similarity of conditions;
the presence of a stable connection in the activities of different regions;
general characteristics of types of activity;
risks.

Required terms

To truthfully provide information about each segment, the following concepts are used:

Segmental income	Reported income that is attributable to a segment or part of an organization's profit that may be attributable to it
Segmental flow	Loss that arises from the activities of a segment
Segment summary	Income minus expenses
Assets	The one that is used by the segment in its activities after completed actions
Segmental Liabilities	Arising during the operation and after its completion
	Policies required for reporting and reporting

What is her role

The main goal is to provide management at all levels of management with the necessary information about the activities of each department for analysis and making important decisions.

This information is necessary to achieve several goals - a better understanding of the results of the past activities of the enterprise and assessment of the risks and profits of the organization, making informed decisions in future activities.

Normative base

The main document that regulates the provision of segmental type reporting is, which was approved on November 8, 2010.

The underlying document is International Financial Reporting Standard No. 14.

According to the Department of Finance, on January 27, 2000, the Accounting Regulations - “Information by Segments” were approved.

The document requires the preparation and presentation of segmental information in accounting reports.

Other regulations and provisions for management:

, adopted on November 21, 1996.
Norms of international financial reporting standards.
IFRS 14 Segment Reporting.

Rules for constructing segmental reporting

The enterprise must go through several stages:

Composition of such documentation

Balance sheet indicators include:

total number of assets;
expenses for the purchase of assets outside of circulation;
obligations;
investments.

Indicators of the profit and cost report:

proceeds from sales to third parties;
revenue from other segments;
price formation base;
transfer of the value of fixed assets and intangible assets;
income or expense.

The financial flow report contains the following standards:

flow of funds.

Formation methods

According to IFRS, the methodology for generating segment reporting includes the following steps:

Identification of the person who makes decisions on conducting operations in the organization	The position does not affect the choice of such a person; the main attention is paid to the functions. These include creating an organizational policy, monitoring its compliance, conducting business assessments, and others. The person can be not one person, but a group
Defining parts of the business	Which generate revenue and incur costs as a result of their activities. The main criterion is not the source of profit, but its significance
Examination	Aimed at analyzing the results of the activities of the second stage. For this purpose, reports are provided to the responsible person
Definition of utility	And the availability of the information provided
Segment activity analysis	To unite them with others
Disclosure of the issue	Do the segments of the reporting period disclose 75% of consolidated revenue?

Conditions and principles of construction

The following requirements are established for internal segmental reporting:

the document must meet the objectives;
the internal report should contain only truthful data, there should be no subjective opinion, the error should be minimal;
timely provision, in those moments when an important decision needs to be made;
information should not contain unnecessary data; a smaller volume facilitates operational comprehension;
indicators must be compared with the coefficients of each segment;
the report must go to the responsible person;
information must not be disclosed to outsiders.

The principles of construction include:

The segment report must be specific and targeted	It is impossible to achieve the expected results if it is sent not to the center manager, but to management
Information is needed promptly	When preparing reports, take into account the psychological characteristics of the manager
There is no need to lean heavily on last year's periods	Since the information should be useful; such that it has a positive impact on the future
Report formats	Don't change it often
There should be no overload of calculations	Data systematization is necessary
Reports should contain only basic information	Which would help employees fulfill the set plan
In addition to registration	Reporting requires a conversation between the accountant and employees

The manager is obliged to make it clear to the accountant (or other person responsible for reporting) how to prepare a segmental report, what information to submit and within what time frame.

When generating segment reporting indicators, it is necessary to take into account the following features:

Using the example of an enterprise

Let's look at a few examples:

The organization "upakovka" produces and sells containers and other packaging materials	The structure of the company is based on a geographical principle - the main office is located in Moscow. He is subordinate to 4 structural divisions located in the cities of the capital. Each branch sells containers in its region. For such an enterprise, the reportable segment will be geographical, since revenue includes several components
An example of an operating segment - the company "Men's Shoes" is engaged in sewing and selling	Includes: sewing workshop; repair department; shoe store; stock

In this case, the operating segment is implied, since revenue depends on such components - profit from, revenue from store sales and from the warehouse.

Carrying out analysis

1. The essence and purpose of segmental reporting

2. Disclosure of information by segments in financial statements

3. Stages of creating segmental reporting

4. Assessing a business segment using basic analysis tools

Bibliography

1. The essence and purpose of segmental reporting

Users need such information in order to:

* better understand the results of the organization's past activities;

* better assess the risks and profits of the enterprise; make more informed decisions regarding the enterprise in the future.

Just as information from external financial statements is used to analyze the financial condition of an enterprise and the results of its activities, segmental reporting data allows us to assess the quality of work of each business segment.

Segment (from lat. segmentum) means a segment, a part of something. Segmental reporting can be defined as reporting generated for individual business segments (responsibility centers) of the organization.

The procedure for its preparation for external users is established by PBU 12/2000, according to which under segment First of all, an independent legal entity is understood, which is either a subsidiary (dependent) enterprise in relation to the parent (main) company, or part of any association, union, holding. Such an enterprise must necessarily be treated as an operating or geographic segment. This, however, does not mean that these segments cannot be divided into smaller ones.

Segmental reporting information is used to make various management decisions. For many Russian enterprises, the issue of survival today is directly related to the need to unbundle (restructure) the business.

Segmental reporting information allows the organization's administration to monitor the activities of different divisions and objectively assess the quality of work of the managers heading them. On its basis, conclusions are drawn about the professional suitability of a particular manager, financial and non-financial criteria for assessing his activities are developed, and a system of material and moral incentives for the enterprise’s personnel is formed.

Segmental reporting helps managers themselves in their work. A manager at any level should always know how well he is doing. If his plans are not being carried out, he must find out about it as early as possible. Otherwise, the manager will not be able to timely adjust the plans of his department, and the goal set for him will be unrealistic.

The IAS International Standards include the IFRS 14 “Segment Reporting” standard. This standard became the basis for the development of PBU 12/2000.

According to both IFRS 14 and PBU 12/2000, two types are provided reporting segments: operational (economic, industry) and geographical. To determine these segments, it is proposed to use the internal structure of the organization and its internal reporting system.

Segment information - information that discloses part of the organization’s activities in certain economic conditions by presenting an established list of indicators of the organization’s financial statements.

The list of segments for which information is disclosed in the financial statements (hereinafter referred to as the reporting segments) is established by the organization independently based on its organizational and management structure.

Operating segment information - information disclosing part of the organization’s activities for the production of a certain product, performance of a certain work, provision of a certain service or homogeneous groups of goods, works, services, which is subject to risks and profits that are different from the risks and profits for other goods, works, services or homogeneous groups of goods , works, services. An operating segment must not include products or services with significantly different risks and rewards.

When isolating information by operating segments, several types of goods, works, and services can be combined into a homogeneous group, provided they are similar in all or most of the following factors:

* purpose of goods, works, services;

* the process of producing goods and performing work;

* provision of services;

* consumers (buyers) of goods, works, services;

* methods of selling goods and distributing works and services;

Organizational performance management systems (if applicable).

Geographic segment information - information disclosing part of the organization’s activities in the production of goods, performance of work, provision of services in a certain geographic region of the organization’s activities, which is exposed to risks and receives profits that are different from the risks and profits that occur in other geographic regions of the organization’s activities. A geographic segment can be a single country, a group of countries, or a region within a country. An organization's risks and rewards depend on the location of its production or service activities, that is, on the location of its operations. But they may also depend on the location of its markets and customers. The selection of a geographical segment can be carried out both by the location of operations and by the location of markets and customers.

Thus, when isolating information by geographic segments, one should proceed from:

1) the similarity of the conditions that determine the economic and political systems of the states in whose territory the organization operates;

2) the presence of stable connections in activities carried out in different geographical regions;

3) similarities between types of activities;

4) risks inherent in the organization’s activities in a certain geographic region;

5) generality of currency control rules;

6) currency risk associated with the organization’s activities in a certain geographical region.

Information on the reporting segment - information on a separate operating or geographic segment that is subject to mandatory disclosure in the financial statements or consolidated financial statements.

Table– Factors considered in selecting a reportable segment

2. Disclosure of information by segments in financial statements

The generation and presentation of information by segments in the financial statements of commercial organizations (with the exception of credit institutions), whose activities involve several types of income generation or are carried out in different geographical regions, in accordance with PBU 12/2000, are necessary only in two cases:

1) when preparing consolidated financial statements by an organization that has subsidiaries and dependent companies;

2) when drawing up consolidated financial statements of associations of legal entities created on a voluntary basis, by the organization which, according to the constituent documents, is entrusted with the preparation of such statements.

The regulatory system requires the separation of information by operational and geographic segments within the framework of a single accounting statement. This allows both external and internal users of financial statements to be able to conduct analysis for the organization as a whole, as well as in the context of individual types of business activities or in relation to separate divisions of the organization located in different geographical areas.

There are operational and geographic segments. Operating segment business is the allocated activity of an organization to produce a certain product, perform a certain job or provide a certain service. At the same time, the production of a specific type of product (work, service) of a given segment should differ in risks and profit from the production of a type of product (work, service) of other operating segments.

Geographic segment - This is the allocated activity of an organization to produce goods, perform work or provide services in a specific geographical region. At the same time, the production of a type of product (work, service) in a given geographic region should differ in terms of risks and profit from the production of a similar type of product (work, service) in other geographic regions in which the organization operates. A geographic segment can be distinguished by the location of the organization's assets or sales markets.

Reportable segment An operating or geographic segment is called, information about which is subject to mandatory disclosure in financial statements or consolidated financial statements. The list of reportable segments is established by the organization independently. Reportable segments must account for at least 75% of the organization's revenue. If the reportable segments identified during the preparation of financial statements account for less than 75% of revenue, then additional reportable segments must be allocated, regardless of whether they satisfy the conditions defined in PBU 12/2000.

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Moscow Financial and Legal Institute

Course work

on financial statements

Segmental reporting

Moscow 2013

segmental accounting statements

Introduction

Conclusion

List of used literature

Introduction

The production and sale of different types (groups) of goods (works, services) that constitute the subject of the organization’s activities can be carried out in different geographical regions. Activities associated with these types (groups) of goods (works, services) may be subject to different risks and have different levels of profitability. Activities conducted in different regions may also involve different risks and rewards.

In modern economic conditions, it is necessary to separately include in the financial statements information about different types (groups) of goods (works, services), as well as the activities of the organization in different regions.

The purpose of disclosing information by segments as part of the financial statements is to help users gain a more complete picture of the organization by providing additional data on the production of various types of goods (works, services) that are the subject of the organization's activities, and the various geographic regions in which the organization conducts its financial activities. -economic activities. Such information allows the interested user to make more informed and informed decisions.

As a rule, both external and internal users are interested in information on segments: shareholders, investors, creditors, suppliers, enterprise employees, etc. In this regard, the level of requirements for record keeping and reporting, and the forms of its presentation, is increasing. These include requirements for determining the composition of financial statements that provide answers to the requests of priority groups of information users. It is no secret that often in the financial report the company's management is able to hide the results of unprofitable areas of activity at the expense of more profitable ones. In this regard, we must not forget about the interests of the company’s shareholders and investors, who operate in different areas and (or) in different geographical areas. Typically, such activities are so heterogeneous that reliable information about them can only be obtained through segmental reporting. In this regard, the requirement to include information on operational and geographic segments of activity in the financial statements of diversified and multidisciplinary organizations is of particular relevance.

However, until now, segment reporting has been considered by Russian scientists and economists as part of the organization’s internal reporting. The concept of “business segment” was replaced by the concept of “responsibility center”. There were no standards for compiling this type of reporting. In modern conditions, Russian specialists involved in the preparation of financial statements are required to have a different understanding of the place and role of information on segments. In international practice, segmental reporting is considered, first of all, as a part of financial statements that discloses information about various areas and regions of the organization’s activities. The creation of a Russian standard for segmental reporting once again demonstrated the relevance of providing additional information on segments of an organization’s activities for investors and creditors. Such reporting not only meets the needs of users, but also forms the image of the enterprise and brings financial reporting closer to a format that complies with international standards.

It is also important that some Russian specialists view segmental reporting as a negative factor that can reveal secret economic information about the organization, thus significantly affecting its competitive position in the market. Therefore, it is of particular relevance to determine the goals and objectives of compiling segmental reporting, which could clearly demonstrate the real possibilities of presenting and analyzing information by segments, its value for both external and internal users.

The purpose of this course work is to study the essence and methodology of compiling segmental reporting.

The objectives of the course work are:

Descriptions of the essence of segmental reporting (Chapter 1);

Consider the rules for constructing segmental reporting (Chapter 2).

Consideration of the construction of segmental reporting using the example of an organization (Chapter 3).

The sources for writing this coursework were taken from regulations, as well as some scientific literary publications on accounting financial statements.

Chapter 1. The essence and significance of segmental reporting

The need for management systems to adapt to changes in external and internal environmental factors dictates the urgent need for a systematic selection, generalization and presentation of information on segments of enterprise activity within the framework of a system of segmental accounting and reporting, which, in turn, should be a subsystem of enterprise management accounting. The purpose of segmental accounting and internal segmental reporting is to provide managers at various levels of the organization, shareholders and owners involved in the management process with information on the actual, planned and forecast performance indicators of the organization’s segments, their assets and liabilities, as well as relevant data on the segments of the financial accounting subsystem for the purpose of further formation of external segmental reporting.

The purpose of external segmental reporting is to provide reliable, relevant and comparable information, generated in accordance with the requirements for such reports, about the organization in the main segments (directions) of its activities for external users. The subject of external segmental reporting is the financial and production and economic activities of the reporting segments of the enterprise, reflected by financial information.

The main document regulating the provision of external segmental reporting is the Accounting Regulations “Information by Segments” 12/2010 (PBU 12/2010), approved by order of the Ministry of Finance of the Russian Federation dated November 8, 2010. No. 143n.

According to PBU 12/2010, there are two types of reporting segments: operational (economic, industry) and geographical. To determine these segments, it is proposed to use the internal structure of the organization and its internal reporting system.

Segment information is information that reveals part of the organization’s activities in certain economic conditions by presenting an established list of indicators of the organization’s financial statements.

Information on an operating segment is information that discloses part of the organization’s activities in producing a certain product, performing a certain work, providing a certain service or homogeneous groups of goods, works, services, which is subject to risks and profits that are different from the risks and profits for other goods, works , services or homogeneous groups of goods, works, services. An operating segment must not include products or services with significantly different risks and rewards.

* purpose of goods, works, services;

* the process of producing goods and performing work;

* provision of services;

* consumers (buyers) of goods, works, services;

* methods of selling goods and distributing works and services;

* organizational activity management systems (if applicable).

Geographic segment information is information that discloses part of the organization’s activities in the production of goods, performance of work, provision of services in a certain geographic region of the organization’s activities, which is exposed to risks and receives profits that are different from the risks and profits that occur in other geographic regions of the organization’s activities. A geographic segment can be a single country, a group of countries, or a region within a country. An organization's risks and rewards depend on the location of its production or service activities, that is, on the location of its operations. But they may also depend on the location of its markets and customers. The selection of a geographical segment can be carried out both by the location of operations and by the location of markets and customers.

Thus, when isolating information by geographic segments, one should proceed from:

1) the similarity of the conditions that determine the economic and political systems of the states in whose territory the organization operates;

2) the presence of stable connections in activities carried out in different geographical regions;

3) similarities between types of activities;

4) risks inherent in the organization’s activities in a certain geographic region;

5) generality of currency control rules;

6) currency risk associated with the organization’s activities in a certain geographical region.

Reportable segment information is information about a separate operating or geographic segment that is subject to mandatory disclosure in the financial statements or consolidated financial statements.

An analysis of domestic practice allows us to conclude that many Russian accountants and economists view external segmental reporting as a negative factor that can reveal secret economic information about an organization, thus significantly affecting its competitive position in the market. Therefore, the study of international experience in the formation and provision of external segmental reporting is of particular relevance.

The American standard FAS-131 “Disclosures about Segments of an Enterprise and Related Information” requires disclosure of information about segments of economic activity (or operating segments), which recognize the components of the company's business (activities) that incur expenses and generate revenues.

Chapter 2. Rules for constructing segmental reporting

2.1 Stages of constructing segmental reporting

Segmental reporting can be defined as reporting generated for individual business segments (responsibility centers) of the organization.

The functions of segmental reporting are as follows:

* monitoring the activities of structural divisions and assessing the quality of work of their managers;

* making informed decisions on its basis by the heads of structural units, planning the activities of the units.

Segmental reporting is compiled on the basis of information collected in the segmental accounting system - internal accounting of the results of activities of individual structural divisions of the organization. Segmental accounting, inherently being the most important component of management accounting, must function in parallel with the financial accounting system.

Setting up segmental accounting and reporting allows you to improve document flow, optimize performance indicators of both individual responsibility centers and the organization as a whole and, as a result, increase profits.

When creating a segmental accounting and reporting system, the following must be taken into account:

The costs of implementing and maintaining the system should be less than the effect obtained from its use;

The system must ensure the confidentiality of information;

The system must be automated and universal.

The most important condition for building a system of segmental accounting and reporting is dividing the organization into centers of responsibility.

The center of responsibility is understood as a structural unit of an organization, headed by a leader (manager) who controls, to a certain extent for this unit, the costs, income and funds invested in this segment of the business.

The quality of work of the responsibility center is assessed by effectiveness and efficiency. Effectiveness is understood as the degree to which a segment achieves its goal (the extent to which it manages to achieve the desired results, the extent to which these results correspond to the goals of the organization as a whole); by efficiency - the performance by a segment of a given amount of work with minimal use of production resources or the maximum amount of work with a given amount of resources.

There are four types of responsibility centers: cost centers, revenue centers, profit centers and investment centers. This classification is based on the criterion of financial responsibility of their managers, which is determined by the breadth of powers granted to them and the completeness of the assigned responsibility.

A cost center is a segment of the organization whose manager is responsible for the costs incurred, i.e., has the least managerial authority among the heads of other responsibility centers. The segmental accounting system is aimed in this case only at measuring and fixing costs at the entrance to the responsibility center. The results of the activities of the responsibility center (volume of products produced, services provided, work performed) are not taken into account, especially since in many cases it is either impossible or unnecessary to measure these results.

Cost centers can be of different sizes; large cost centers can consist of smaller ones. The level of detail depends on the goals and objectives set by management for the cost control manager assigned to the responsibility center.

A revenue center is a responsibility center whose manager is responsible for generating revenue but is not responsible for costs.

The activities of the center manager are assessed on the basis of earned income, so the task of segmental accounting in this case will be to record the results of the activity of the responsibility center at the output.

A profit center is a segment of an organization whose manager is responsible for both the income and costs of his division. The profit center manager makes decisions on the amount of resources consumed and the amount of expected revenue. The criterion for assessing the activities of such a responsibility center is the amount of profit received. Therefore, segmental accounting must provide information about the cost of costs at the entrance to the responsibility center, costs inside, as well as the final results of activities at the output. The profit of a responsibility center in a segmental accounting system can be calculated in different ways. Sometimes only direct costs are included in the calculations, in other cases indirect costs are also included in whole or in part.

Investment centers are segments of an organization whose managers control not only the costs and income of their divisions, but also monitor the effectiveness of the use of funds invested in them.

The heads of investment centers, in comparison with the heads of all the above-mentioned responsibility centers, have the greatest authority in management and, therefore, bear the highest responsibility for the decisions made. In particular, they are delegated the right to make their own investment decisions, that is, to distribute funds allocated by the organization’s administration to individual projects.

Research shows that in the conditions of an underdeveloped market economy, Russian organizations are represented mainly by cost and income centers, or at best, profit centers; investment centers are extremely rare. The rich foreign experience in organizing the functioning, accounting and evaluation of the activities of these responsibility centers is practically not used.

When preparing segmental reporting, you should be guided by the following principles:

1) reporting must be targeted, i.e., compiled in accordance with the information requests of a specific data recipient;

2) segmental reporting should be as prompt as possible;

3) reporting data must be comparable with data from previous periods and planned indicators. To optimize control over the effectiveness of various areas of the company’s activities, it is advisable to compile internal segmental reporting by geographic sales areas, types of customers, product assortment groups, etc. Operational monitoring of the organization’s performance in these aspects, carried out on the basis of a detailed analysis of internal segmental reporting, will allow timely prevention of the emergence and growth of negative aspects associated with individual business segments, as well as preventing the strengthening of their influence on other segments and the results of the organization’s activities as a whole.

In general, as the experience of foreign and Russian companies shows, the introduction of a system of segmental accounting and reporting at enterprises leads to an improvement in their financial condition.

2.2 Rules for constructing reporting by segments for external users

The procedure for preparing financial statements by segments for external users is regulated by PBU 12/2010 “Information by Segments”, approved by Order of the Ministry of Finance of the Russian Federation dated November 8, 2010 No. 143 n.

Among the international financial reporting standards (IFRS), which Russian accounting is gradually approaching, a similar standard exists. This is IFRS No. 14 “Segmental Reporting”, which determines the procedure for reporting on business segments in countries with market economies. Essentially, this is the “progenitor” of PBU 12/2010, and the goal of adopting a new Russian standard was adopted in 1983; the need for its appearance arose much earlier, in the late 50s, associated with the rapid development of Western companies. Two main directions of this development can be distinguished.

Firstly, the range of manufactured products expanded, penetration into new areas of activity was carried out, and new markets were conquered. This indicated the beginning of the process of production diversification - the transition from simple mono-productions to multi-industry technologies with a wide range of products. This restructuring increased the financial stability and competitiveness of enterprises. It became possible to cover losses incurred in one area of activity with profits from the sale of other types of products (works, services).

Secondly, due to the development of sales markets, large companies began to actively operate in different geographical regions.

Thus, when preparing financial reports, it became necessary, along with other data, to include additional information in an industry breakdown (by business segments) and taking into account the geographic location of sales markets (by geographic entities). The preparation of reporting for such segments is necessary for both external and internal users, since, on the one hand, it is included in the financial statements, and on the other hand, it forms the basis for making various management decisions for business segments.

Segmental reporting, prepared in accordance with the principles of IFRS 14, summarizes information regarding the different types of goods and services a company produces and the different geographic areas in which it operates to help users of financial statements:

1. Better understand the company’s performance in previous periods;

2. More accurately assess the company’s risks and profits;

3. Make more informed decisions regarding the company as a whole and its individual divisions;

Many modern Western companies produce groups of goods (or services) or operate in geographical regions with different rates of profitability, development opportunities, future prospects and risks. In this case, segmental reporting helps to understand the effectiveness of various areas of the company's business, which cannot be determined from its aggregate data. Thus, segmental reporting, along with other financial information, is considered by international standards as necessary to meet the needs of users of financial statements.

The problems noted above are gradually becoming relevant for domestic accounting. In the Russian economy there are already enterprises with a network of branches, representative offices, subsidiaries and affiliates that are developing various sales markets. Such enterprises can be divided into separate segments, the contribution of which to the formation of the final financial result of the organization is different. Consequently, there is a need to analyze the income and expenses of each segment. The solution to this problem is the prerogative of the management accounting system.

In the regulatory documents regulating accounting in the Russian Federation, the first mention of the need to prepare information on the activities of segments occurs in 1996. The Instructions on the procedure for filling out annual accounting reporting forms, approved by Order No. 97 of the Ministry of Finance of the Russian Federation dated November 12, 1996, states that the explanatory note “needs to provide additional data on the volume of sales of products, goods, works, services by type of activity and geographical regions."

The following regulatory document relevant to the issue under consideration: Regulations on accounting and financial reporting in the Russian Federation, approved by order of the Ministry of Finance of the Russian Federation on July 29, 1998 No. 31n. In accordance with clause 91, if an organization has subsidiaries and dependent companies, in addition to its own accounting report, it also prepares consolidated (accounting statements, including indicators of the reports of such companies located on the territory of the Russian Federation and abroad. The same document provides for the formation of a consolidated annual financial statements by associations of legal entities created on a voluntary basis (unions, associations). However, the results of the activities of individual enterprises are not visible from the summary consolidated statements. This “omission” is eliminated after the adoption of PBU 12/2010 “Information by segments”.

Organizations preparing consolidated financial statements must take into account the requirements of the latest Regulations. It is not necessary for small businesses.

The Regulations, first of all, provide recommendations for “recognizing” segments and formulate rules for attributing income, expenses, assets and liabilities to them. At the same time, for the purposes of compiling external reporting, a segment is understood as “part of the organization’s activities in certain economic conditions.”

By analogy with IFRS No. 14, two types of segments are distinguished - operational and geographical. An operating segment is “a part of an organization’s activities for the production of a certain product, performance of a certain work, provision of a certain service, or a homogeneous group of goods, works, services, which is subject to risks and profits that are different from the risks and profits of other goods, works, services or homogeneous groups.” goods, works, services."

Geographic segment is “part of the organization’s activities in the production of goods, performance of work, provision of services in a certain geographic region of the organization’s activities, which is subject to risks and profits that are different from the risks and profits that occur in other geographic regions of the organization’s activities.

Summarizing the above, we can conclude: in the interpretation of PBU 12/2010, a segment is primarily understood as an independent legal entity, either a subsidiary (dependent) enterprise in relation to the parent (main) company, or part of any association, union, holding . Such an enterprise must necessarily be treated as an operating or geographic segment. This, however, does not mean that these segments cannot be divided into smaller ones.

It is assumed that the segments carry out external sales and also sell products (work, services) among themselves using transfer prices.

Income (revenue) of a segment consists of the following two components:

Revenues that are directly attributable to the segment

The portion of an organization's total revenue that can reasonably be attributed to a given segment. To determine it in practice, indirect calculation methods are used.

Operating segment income is revenue from the sale of certain goods, from performing certain works, and providing certain services. Geographical segment income is revenue from the production of goods, performance of work, and provision of services in a certain geographic region of activity.

If segments sell products (works, services) among themselves, then external prices, rather than transfer prices, are used to objectively assess their income.

The following are not segment income:

Interest and dividends, income from the sale of financial investments, except when such income is the subject of the segment’s activities;

A similar approach is proposed for accounting for segment expenses. Like income, they consist of two components:

Expenses that can be directly attributed to the segment;

The portion of an organization's total expenses that can reasonably be allocated to a given segment. This component, unlike the first one, is calculated by indirect methods.

The following are not included in segment expenses:

Expenses on financial investments, if these financial investments are not the subject of the segment’s activities;

Income tax;

The financial result of a segment's activities (profit or loss) is determined as the difference between the income it receives and the expenses incurred.

Let's look at examples. The parent textile company has created a number of small industries aimed at different consumers: the medical industry (production of cotton wool and gauze), household (sewing kitchen towels, aprons, etc.), textile industry (fabric finishing), clothing industry (fabric production) . In accordance with the requirements of PBU 12/2010, these productions should be considered as independent operating segments (see Table 1).

Table 1. Reporting information on the operating segments of the activities of OJSC Spasskoye Moloko for the previous year, thousand rubles.

Index	Butter	Fermented milk products	Powdered milk	Whole milk substitute	Other operations	Total for the plant









Total assets of the plant

A large holding company producing electrical appliances has its enterprises in the Russian Federation and two neighboring countries - in Belarus and Ukraine, which, in accordance with PBU 12/2010, can be considered as geographical segments (see Table 2).

Table 2. Reporting information on the operating segments of the activities of OJSC Spasskoye Moloko for the reporting year, thousand rubles.

Index	Butter	Fermented milk products	Powdered milk	Whole milk substitute	Other operations	Total for the plant

Information on revenue and financial results
Revenue from sales to external customers

Financial result (profit or loss)
Information about assets and liabilities
Book value of segment assets
Depreciation charges for fixed assets and intangible assets
The total amount of capital investments in fixed assets and intangible assets
Undistributed assets of the plant
Total assets of the plant
Undistributed total liabilities of the plant

A segment is identified with those assets that it uses to produce certain goods, perform work, provide services, or to produce goods, perform work, or provide services in a certain geographic region of the organization’s activities. Most assets can be easily identified with a specific division of the organization. Buildings, equipment, inventories of materials, finished products and accounts receivable belong to the segment that produces these products (work, services).

If assets simultaneously belong to two or more segments, then they are distributed between structural divisions using indirect methods. The indicator adopted as the distribution base must be recorded in the organization’s accounting policies and consistently applied from one reporting period to another.

However, some types of assets (head office building, goodwill, organizational expenses, cash, etc.) cannot be identified with the activities of a specific segment. In practice, such assets are not distributed between segments and are attributed to the company’s activities as a whole (Table 3).

Table 3. Dynamics of income, expenses and financial results of operating segments of OJSC Spasskoye Moloko

Index	Business segments
	Butter	Fermented milk products	Powdered milk	Whole milk substitute

Last year
Reporting year
Change (+, -)
Growth rate, %
Segment expenses, thousand rubles.
Last year
Reporting year
Change (+, -)
Growth rate, %

Last year
Reporting year
Change (+, -)
Growth rate, %
Segment profitability, %
Last year
Reporting year
Change (+, -)
Expenses per ruble of sales revenue, kopecks.
Last year
Reporting year
Change (+, -)

External debt that a segment has incurred in connection with the production and sale of products (works, services) is considered by PBU 12/2010 as a segment liability. Indeed, some types of current liabilities (for example, accounts payable) are easily identified with the activities of a specific division. For example, the payment of interest on long-term loans and borrowings raised in the interests of the development of the company as a whole is not identified with the activities of segments. The segment's liabilities do not include income tax debt to the budget. In practice, such obligations remain unallocated.

Having considered the question of what can be understood as a segment for the purposes of compiling external reporting, let us move on to solving the following problem: which of the selected segments should become reportable? The Regulations define the rules for selecting reporting segments, i.e. those structural divisions of the organization for which, in addition to consolidated reporting, segmental accounting information will be presented.

In accordance with PBU 12/2010, such a choice is made by the organization independently, taking into account the organizational structure of the legal entity (which is fully consistent with the principles of management accounting).

Assuming freedom of choice on the part of enterprises, the Regulations formulate necessary and sufficient conditions for this. Essentially it's about following three steps.

In step 1 we check that certain conditions are met. The Regulations stipulate that several types of goods (work, services) may be included in one operating segment if they are combined by the following factors:

Purpose of goods (works, services);

The process of their production;

Common consumers or common methods of selling products (works, services).

If the research object does not have any of the above characteristics, the search for another segment begins. If at least one of the signs exists, then the group of goods, works, services can be considered as a segment.

For example, a holding company consists of a parent company and several subsidiaries engaged in production, trade and services. The industrial enterprise produces various types of computer equipment. The trading organization sells this and other equipment, as well as software for it. In addition, the holding has an enterprise engaged in servicing computer equipment. It can be seen that all enterprises that are part of the holding meet the above criteria, and then can be considered as reportable segments.

In another example given earlier, the structural divisions of a textile company focused on the medical industry, household, textile and clothing industry meet the above criteria, which allows these productions to be classified as independent segments.

As for geographic segments, information on them can be generated depending on the location of assets or the location of sales markets.

Thus, a holding company that produces electrical appliances and has its enterprises in the Russian Federation, Belarus and Ukraine must provide information on geographical segments as part of its financial statements, i.e. for Russian, Belarusian and Ukrainian enterprises.

Step 2 is associated with checking whether sufficient conditions are met. According to PBU 12/2010, an operating or geographic segment should be considered reportable if:

Revenue from sales to external customers and from transactions with other segments of this organization is at least 10% of the total revenue (external and internal) of all segments;

The profit (or loss) from the activities of this segment is at least 10% of the total profit (or loss) of all segments;

The assets of this segment constitute at least 10% of the total assets of all segments.

If none of the conditions are met, then the segment is enlarged. If at least one of the conditions is present, then the segment should be considered as reportable.

Step 3 is the last in the process of generating reportable segments. It is associated with determining the share of their total revenue in the total revenue of the organization. If this share is less than 75%, then the segments are considered reportable; if it is 75%, then additional reporting segments must be allocated.

After identifying the reportable segments, it is necessary to decide in what format to present information about their activities. The Regulation distinguishes two concepts of information by segment: “primary” and “secondary”. The decision about which of them should be primary ultimately depends on the organizational and management structure of the organization, on the construction of the internal reporting system.

If the risks and profits of an organization are determined mainly by differences in the goods, works, and services produced, then the disclosure of information by operating segments is considered primary, and the disclosure of information by geographic segments is considered secondary.

If an organization's profits and risks are determined primarily by differences in the geographic regions of its operations, then information on geographic segments is considered primary, and information on operating segments is considered secondary.

In any case, the following indicators are disclosed as part of the primary information for the reporting segment:

Total revenue, incl. received from sales to external customers and from transactions with other segments;

Financial results;

Total balance sheet amount of assets;

Total amount of liabilities;

The total amount of capital investments in fixed assets and intangible assets;

The total amount of depreciation charges for fixed assets and intangible assets.

In our example with a holding company that produces electrical appliances in different neighboring countries, primary information on segments can be presented as shown in Table. 4.

Table 4. Dynamics of the structure of income, expenses and financial results of the operating segments of the organization

Index	Specific gravity, %
	Butter	Fermented milk products	Powdered milk	Whole milk substitute	Other operations

Revenue from sales of the segment, thousand rubles.
Last year
Reporting year
Change (+, -)
Segment expenses, thousand rubles.
Last year
Reporting year
Change (+, -)
Profit from segment sales, thousand rubles.
Last year
Reporting year
Change (+, -)

Secondary information in this case will be represented by data on the activities of operating segments. They are allocated additionally and must satisfy one of two conditions:

Revenue from external sales of this segment is at least 10% of the organization’s total revenue;

The value of assets of this segment is at least 10% of the value of assets of all operating segments.

If operating segments are separated, the following secondary information is presented in the financial statements for them:

Revenue from sales to external customers;

Balance sheet value of assets;

The amount of capital investment in fixed assets and intangible assets.

If the organizational and management structure of the organization, as well as the internal reporting system, are not based either on the goods, works, services produced, or on the geographical regions of activity, then the procedure for generating primary and secondary information by segments is determined by the decision of the organization’s management.

Segmental reporting can and should be presented by organizations that not only have subsidiaries and dependent companies, but also prepare consolidated reporting. Just as the results of financial accounting are summarized in external financial reporting, the final stage of management accounting is the formation of internal reporting.

Chapter 3. Composition and methods of compiling segmental reporting of OJSC Spassky Moloko

Open joint-stock company "Spasskoye Moloko" was created in 2000. The main activities of the enterprise are: production and processing of agricultural products, production and sale of whole milk, low-fat dairy products, trade and purchasing activities.

The organizational structure of the enterprise is shown in Fig. 1.

Accounting at the enterprise is maintained by a separate structural unit. In addition to the chief accountant, there is a cashier and two accountants.

The main tasks of accounting at OJSC Spasskoye Moloko, as at a manufacturing enterprise, are as follows:

timely and complete reflection in the accounting of cash flows and material assets, their correct assessment;

timely and complete accounting of production costs and correct calculation of its cost;

monitoring the implementation of the production plan and sales of finished products;

control of the correct use of equipment, consumption of raw materials, fuel in accordance with standards.

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Rice. 1. Organizational management structure of OJSC “Spasskoye Moloko”

According to the accounting policy of Spasskoye Moloko OJSC, a journal-order form of accounting with elements of the automated management system “1C-Enterprise” has been established.

The accounting policy of Spasskoye Moloko OJSC contains the following documents:

accounting policies for accounting purposes;

accounting policy for tax accounting purposes;

working chart of accounts;

regulations on the procedure for conducting inventories of the organization’s property and obligations and exercising internal control over business operations;

regulations on the permanent inventory commission;

forms of primary accounting documents;

organization's document flow schedule;

audit schedule of finished products and raw materials.

The accounting policy stipulates that for profit tax purposes, accounting for income and expenses at the enterprise in question is carried out using the accrual method.

The accounting policy of Spassky Moloko OJSC is described in the order “On Accounting Policy” and contains the following points:

depreciation of intangible assets should be calculated using the straight-line method;

fixed assets used for a period exceeding 12 months, with a cost of no more than 10,000 rubles per unit, are written off as production costs as they are released into production or operation;

depreciation of fixed assets is calculated using the straight-line method; The process of acquiring and procuring materials should be taken into account in the assessment at actual cost using account 10 “Materials”;

when releasing inventories into production and otherwise disposing of them, they are assessed using the FIFO method;

finished products should be accounted for in the debit of account 43 “Finished products” at the actual production cost;

do not create a reserve for doubtful debts, a reserve for a decrease in the value of material assets;

do not create reserves: to pay for vacations, to pay remuneration for long service.

the moment of determining the tax base for VAT - as payment is made;

Income and expenses for profit tax purposes are determined using the accrual method.

Analysis of reporting information in the context of operating segments of the activities of OJSC Spassky Moloko is carried out on the basis of accounting data on sales revenue, expenses, financial results, book value of assets, accrued depreciation on fixed assets and intangible assets, and liabilities of individual segments. It should begin with an assessment of the validity of identifying reportable segments. To do this, it is necessary to check the information received on operating segments for compliance with all the requirements for them.

According to OJSC "Spasskoye Moloko", based on the differences in product types in production and technological processes, the following operating segments have been identified: butter; fermented milk products; powdered milk; whole milk substitute.

Most often, information on operating segments is recognized as the primary format for segmental reporting. At the analyzed enterprise, it is possible to identify for each operating segment not only sales revenue and financial results, but also the book value of assets, the total amount of capital investments in fixed assets and intangible assets, and depreciation charges on them. At the same time, it is problematic to distribute the organization's obligations between segments with sufficient accuracy. In general, information on operating segments for the previous and reporting year is presented in Table. 1 and 2.

Since it is less problematic to identify revenue and financial results for the selected operating segments, it becomes possible to calculate the following key segment performance indicators:

Dynamics of segment sales revenue;

The share of segment revenue in the total sales revenue of the organization as a whole;

Dynamics of the financial results of the segment;

The share of the financial result of the segment in the total financial result of the organization as a whole;

Segment profitability (the ratio of a segment’s financial result to its revenue) and its dynamics;

Segment expenses per ruble of segment revenue and their changes.

The calculation of these indicators is presented in table. 3.

Table data 3 allow us to see that in the reporting year, compared to the previous year, there was an increase in sales revenue for all operating segments. The most significant increase was obtained in the production of milk powder (1.8 times) and whole milk substitute (1.7 times). At the same time, across all segments, costs are growing faster than revenue, which has led to lower rates of profit growth (for example, profit from the production of powdered milk increased by 57.7%, and profit from the production of whole milk substitute - by 65.3%). On a positive note, all operating segments were profitable.

Despite the decrease in this indicator in the reporting year compared to the previous one in all business segments of Spasskoye Moloko OJSC, profitability is quite high.

The most profitable activities of the plant are the production of fermented milk products (25.9%) and the production of whole milk substitute (26.3%). The most expensive is the production of butter (costs per ruble of revenue amounted to 78.5 kopecks).

To assess the impact of the results of the operating segments on the overall financial result of the dairy plant Spasskoye Moloko OJSC, a structural analysis of income, expenses and profit of individual types of activities of the organization should be carried out (Table 4).

From the data in table. 4 it follows that the largest share in the total revenue of the plant in the reporting year is occupied by revenue from the sale of fermented milk products, i.e. 39.9%, while compared to the previous period it increased by 1.1 points. Even more significant is the impact of this operating segment on the financial result, since the share of profit from sales of fermented milk products amounted to 42.3%. It is positive that it has increased by 1.5 points compared to the previous year. The production of whole milk substitute has the smallest share of influence on its revenue and financial results from sales compared to other segments of the activities of the Spasskoye Moloko OJSC plant, although compared to the previous period there was an increase in structural indicators. At the same time, the share of butter production is reduced, which does not cause a decrease in the overall level of profitability of the plant, since this type of product is the most cost-intensive.

If in the reporting for each operating segment we were able to highlight the value of assets, liabilities and other indicators, then in addition to the previously listed indicators, the following can be calculated and analyzed over time:

The share of segment assets in the total amount of assets distributed between segments;

The share of segment assets in the total assets of the organization;

Similar indicators for liabilities, capital investments, depreciation charges for fixed assets and intangible assets;

Segment asset turnover (the ratio of segment revenue to the average annual value of its assets);

Return on segment assets (the ratio of segment profit to the average annual value of its assets).

In general, such an analysis makes it possible to assess the contribution of each segment to the overall results of the organization, determine the effectiveness of individual types of its activities and the level of risks, which is important both for internal management and for external users of financial statements (owners, potential investors, etc.).

It is also advisable to begin the analysis of reporting information on geographic segments of an organization’s activities with an assessment of the validity of identifying reporting geographic segments.

According to Spassky Moloko OJSC, based on the similarity of economic and political conditions of the regions where the company sells its products, the proximity of operations, and the similarity of risks, the following can be distinguished as geographic segments: Central Chernozem region; Central District; Volgo-Vyatsky district; North-West region; Europe; CIS countries.

First of all, it is necessary to carry out a quantitative calculation of indicators to recognize the selected geographical segments as reportable (Table 5).

Table 5. Calculation of quantitative criteria for identifying reportable geographic segments by sales markets

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Geographic segment	Segment revenue from sales, %	Meeting the 10% selection criterion
	Last year	Reporting year	Last year	Reporting year
Central Chernozem region
central District
Volgo-Vyatsky district
North-West region
Countries of Europe
CIS countries
Total for selected segments