IMPROVING THE METHODOLOGICAL FOUNDATIONS FOR REFLECTING INNOVATION ACTIVITIES IN THE MANAGEMENT ACCOUNTING OF BUSINESS ENTITIES

Abstract

This article examines the theoretical and methodological issues related to reflecting innovation activities in the management accounting of business entities. The study highlights the economic essence of innovation, its role in enterprise operations, and its significance within the management accounting system.

Based on the analysis of current practices, the research identifies existing problems in accounting for innovation expenditures. In particular, it is substantiated that innovation costs are not assigned to separate accounting objects, their classification is insufficiently developed, and mechanisms for evaluating efficiency are lacking.

As a result of the study, scientific proposals and practical recommendations have been developed to improve the reflection of innovation expenditures in management accounting. These include an enhanced classification of innovation costs, a management accounting model, and a system of Key Performance Indicators (KPIs) for assessing efficiency.

The implementation of these proposals in practice can enhance the effectiveness of innovation activities in business entities and improve the quality of managerial decision-making.