currency translation

Foreign Currency Translation

When a parent-subsidiary relationship exists between two companies in different countries using different currencies, the act or practice of changing the financial statements of the subsidiary to conform to the accounting standards of the parent's country, as well as re-denominating the subsidiary's currency into the parent's currency. According to the Generally Accepted Accounting Principles in the United States, the translation of a foreign currency to U.S. dollars must be accurate as of the date on the financial statement. If there have been substantial changes to the exchange rate since that date, the consolidated financial statement must note this.

currency translation

the translation of the financial accounts of foreign subsidiaries, which are expressed in terms of local currencies, into the currency of the parent company so that they can be included in the CONSOLIDATED ACCOUNTS. Thus a UK MULTINATIONAL ENTERPRISE with a US subsidiary would need to translate the accounts of the subsidiary expressed in dollars into sterling in order to consolidate them with its UK accounts. The most common method of translation is the closing rate method which translates all ASSETS, LIABILITIES, REVENUES and costs at the currency exchange rate ruling at the end-date of the ACCOUNTING PERIOD.
References in periodicals archive ?
Foreign currency translation had a significant impact on the third quarter results, reducing reported revenue by 8%, operating income by 11%, and earnings per share by 13%.
Unfavorable currency translation rate changes decreased consolidated net sales 3.
The year-over-year increase of five percent (seven percent on a constant-currency basis) was driven primarily by growth in property, insurance, international and underwriting solutions which was partially offset by adverse foreign currency translation impacts and lower project-related volumes.
Operating profit, excluding items affecting comparability, rose 10% (9% excluding gains on forest swaps and currency translation effects) to SEK 3,217 million ($376.
Sales in the fourth quarter were $2,990 million, 3% above the prior-year quarter excluding negative currency translation effects.
Foreign currency translation, and hedges at Pratt & Whitney Canada, had an adverse impact of $0.
Solely because of the change in the exchange rate, the company's intercompany accounts (prior to any currency translation adjustments) no longer balance, as shown in Exhibit 2.
Sales increased 7 percent, excluding the impact of currency translation, primarily due to organic growth recorded in all divisions for the quarter.
8 million in the first six months due primarily to volume gains, selling price increases, currency translation impact and acquisitions.
Excluding the impact of foreign currency translation, net sales rose 9% for the year.
The sales increases were mainly due to higher shipments, reflecting strong retail demand, the impact of currency translation and improved price realization.
Currency translation is another important element to add to your site.