5 things you should know about financial report translations from German (IFRS)
Photo credit: Mathias Konrath
Financial reporting is an essential part of listed companies’ annual and quarterly reports. As such it forms an essential part of the communication with stakeholders and provides valuable information for executives. As business and investor relations have become international, this calls not only for accepted international reporting standards, but in the case of Germany also for precise financial translations.
The London-based IASB (International Accounting Standards Board) is an independent body that issues the most widely accepted accounting standard IFRS (International Financial Reporting Standards). As part of the European Union, German companies adhere to IFRSs for their financial reporting. While these reports are mostly written in German, there are many international stakeholders and publishing an English version of annual and quarterly reports is the norm.
IFRS Standards prescribe a specific structure, mandatory content and precise terminology for financial statements. German-to-English translators need to be familiar with this framework and stay up to date with the most recent terminology in both languages. As with all areas of translation, accounting has its regional idiosyncrasies. Read on to find out more about the most common traps and mistakes in IFRS translations from German to English.
1. Depreciation, amortisation, impairment or write-down
Possibly the most challenging term to translate in financial reports is “Abschreibungen”, as English has different terms for this depending on the type of asset and its value.
2. Assets and liabilities
Assets and liabilities are important parts of any statement of financial position, so it is important to translate them correct and consistently:
|non-current assets||langfristige Vermögenswerte|
|current assets||kurzfristige Vermögenswerte|
|non-current liabilities||langfristige Schulden|
|current liabilities||kurzfristige Schulden|
3. Using up-to-date terminology
The IRFSs are a work in progress as they must adapt to new regulations and developments in the world of business. Sometimes this comes with new terminology, so translators should always make sure their resources are up to date before they work on a financial report. These are some of the more recent updates:
|Bilanz||statement of financial position (formerly “balance sheet”)|
|Gewinn- und Verlustrechnung (GuV)||statement of comprehensive income (formerly “income statement”)|
|Eigenkapitalveränderungsrechnung/Eigenkapitalspiegel||statement of changes in equity|
|Kapitalflussrechnung||statement of cash flows (formerly “cash flow statement”)|
4. Don’t fall for the British/American trap
Apart from the general differences in spelling and punctuation, British and American English also have differences in terminology that are relevant for financial translators:
|financial year||fiscal year|
|one-off effect||one-time effect|
|as at||as of|
5. Watch out for “Denglish”
Literal translations often result in questionable style and sentence structure, but there are a few notorious phrases that are used frequently in German reports. A bad translation can produce results that range from confusing to offensive.
- Impuls: the English word “impulse” is a mechanical term, whereas German also uses it to refer to input, ideas or motivation.
- Bereits: “bereits” is used much more frequently than “already”. In most cases the tense of the verb implies the “already”, so it shouldn’t be translated.
- Vier-Augen-Prinzip: a questionable but widely accepted term in German, there is no “four-eyes principle” in English. “Double-checked” or “third-party review” work well in most situations.
- Sehr geehrte Damen und Herren: the generic German plural address can be translated very differently depending on context. In fact, a letter from the CEO will usually start without an address.
Do you have a questions about the translation of your annual report, CSR report or quarterly report? The team at EnglishBusiness has more than 20 years of experience translating for listed companies in Germany and abroad. Just contact our consultants to find out more!