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 ?
Revenue outlook includes the benefit of approximately 60 basis points of foreign currency translation and equates to constant currency revenue growth of 8.
The sales increase consisted of 2 percent growth in organic sales partially offset by a 1 percent decline from negative currency translation.
The company said the 2% decrease over the prior year quarter was largely the result of a 3% decrease due to foreign currency translation impact and a 1% decrease in organic volume, partially offset by a 1% increase each from pricing and acquisitions.
Operating expenses at $104 million remained at the same level as last year, with some reduction benefiting from currency translation.
Growth in 2015 reflected acquired sales, higher net selling prices and increased shipments of Technical Products that more than offset negative impacts from currency translation and lower Fine Paper & Packaging shipments.
61 per diluted share, which was reduced by 3 cents due to balance sheet currency translation impact, compared to non-GAAP net income of $25.
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.
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.