IMPROVING THE MANAGEMENT REPORTING METHODOLOGY BY SEGMENTS AND RESPONSIBILITY CENTRES

Abstract

The article examines opportunities for improving management reporting methodology in the dimensions of segments and responsibility centres. It highlights the potential for harmonising internal management segmentation, which follows products, services and customers, with external segmentation under IFRS 8, which follows the structure of information reviewed by the chief operating decision maker. A two-tier segmentation methodology is developed, harmonising internal management segments formed by products and services with responsibility centres and with operating segments determined in accordance with IFRS 8 requirements. The main conclusion is that connecting internal and external segmentation through a documented reconciliation bridge can enhance the consistency and practical usefulness of management and financial reporting.