5 things you should know about financial report translations from German (IFRS)

IFRS translations German to English

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.

Contents:
1. Depreciation, amortisation, impairment or write-down
2. Assets and liabilities
3. Using up-to-date IFRS terminology”
4. Don’t fall for the British/American trap
5. Watch out for “Denglish”
Bonus:
IFRS resources for the translation of annual reports
ESEF – new electronic format for financial reports
Let us consult you on the translation of your annual report!

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.

  • Depreciation

    planmäßige Abschreibungen (auf Sachanlagen)

    Property, plant and equipment is depreciated.

  • Amortisation

    planmäßige Abschreibungen (auf immaterielle Vermögenswerte)

    Intangible assets are amortised.

    Note: German differentiates between “planmäßig”/”außerplanmäßig” (scheduled/unscheduled) whereas English just uses different verbs to convey these differences. “Planmäßig” should thus not be translated.

  • Impairment loss

    außerplanmäßige Abschreibung

    The amount by which the carrying amount of an asset exceeds its recoverable amount.

    Note: again, there is no such thing as “unscheduled” or “non-scheduled” impairment. “Außerplanmäßig” should not be translated.

  • Write-down

    außerplanmäßige Abschreibung

    Assets are written down if impairment testing shows that their value has declined.

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 assetslangfristige Vermögenswerte
current assetskurzfristige Vermögenswerte
non-current liabilitieslangfristige Schulden
current liabilitieskurzfristige Schulden

3. Using up-to-date IFRS 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:

Bilanzstatement of financial position (formerly “balance sheet”)
Gewinn- und Verlustrechnung (GuV)statement of comprehensive income (formerly “income statement”)
Eigenkapitalveränderungsrechnung/­Eigenkapitalspiegelstatement of changes in equity
Kapitalflussrechnungstatement 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:

BritishAmerican
financial yearfiscal year
one-off effectone-time effect
as atas 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.

IFRS resources for the translation of annual reports

Up-to-date resources are the foundation of any professional IFRS translation. At EnglishBusiness, we use a combination of online dictionaries, exclusive inhouse resources and client-specific translations memories, term bases and style guides.

If you are looking for reliable information on current reporting standards, you can consult our experts or conduct your own research using one of these resources:

eIFRS – electronic International Financial Reporting Standards

eIFRS is the IFRS Foundation’s paid research portal.

Pros:

  • Official IFRS resource
  • Comparison tool to keep up with changes to the standards
  • Simplified search with the eIFRS Terminology Lookup Tool
  • Available in several languages

Cons:

  • Not designed as a translation tool
  • Steep price tag

Cost:

  • £295 per year

Wiley Interpretation and Application of IFRS Standards

Wiley’s book offers a complete and up-to-date explanation of all IFRS requirements, coupled with examples of how to apply the rules in complex, real-world situations.

Pros:

  • One-stop resource for understanding current IFRS. Indispensable guide, background information
  • Complete and up-to-date explanation of all IFRS requirements, coupled with examples of how to apply the rules in complex, real-world situations.
  • Upgrades your bookshelf as a Zoom background

Cons:

  • Since the IFRS are updated every year, this becomes an annual purchase.

Cost:

  • Print: $115
  • e-book: $92

International Financial Reporting Standards (IFRS) by Wiley

A bilingual edition of the IFRS as a resource for German-to-English and English-to-German translators.

Pros:

  • Clear comparison of the English source text and its German translation.
  • Affordable price

Cons:

  • No electronic searchability
  • Needs to be replaced annually

Cost:

  • Softcover edition: €29.99

Deloitte Model IFRS Financial Statements

Deloitte’s sample financial statement in English and German illustrate the impact of the application of the IFRS.

Pros:

  • Extensive research material on the application of the IFRS
  • Terminology research by comparing the English and German versions

Cons:

  • Research is complicated by two separate PDF documents

Cost:

  • Available free of charge

BDÜ seminars for financial translators

We often recommend a seminar at the BDÜ to aspiring German to English or English to German financial translators. You get an introduction to financial reporting or can brush up your knowledge if you have translated annual reports in the past.

ESEF – new electronic format for financial reports

Numbers are an integral part of any financial report. The European Single Electronic Format will make it easier to compare the figures and applies as of the 2020 financial year. The new standard enables different programmes to extract and analyse data. Find out more about the ESEF and the XBRL file format here.

Let us consult you on the translation of your annual report!

Do you have any questions regarding 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!

Kayla Hirsch

Kayla Hirsch
Translation Editor & Consultant

Kayla is from the Southeast of the US, where she earned degrees in political science and German studies. She loves traveling, and she lived in Washington, D.C., Berlin and Nuremberg before she decided to settle in Hamburg. In her free time, she’s usually watching films or reading; at EnglishBusiness she’s an expert on translation and proofreading. You’ll find articles from her here on all things linguistics and written communication.

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