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 ?
This change in third quarter 2019 sales included a decrease of 2 percent organic volume and a decrease of 2 percent related to the unfavorable effects of currency translation as compared to the prior year's third quarter.
The sales increase consisted of 2/4 percent growth in organic sales, partially offset by 1/4 percent negative currency translation.
Excluding unfavorable currency translation impacts of approximately 7.1 %, net sales in the first quarter of 2019 increased approximately 6.5% compared to the first quarter of 2018.
of currency translation, new consolidation of subsidiary and strong
Sees FY19 revenue down in the low single digits compared with the prior year, inclusive of an approximate 130 basis-point unfavorable impact from currency translation and an 80 basis-point combined benefit from the Jack Black acquisition and Playtex gloves divestiture.
This was mainly driven by higher deposit margins and balance growth in RBWM, and GLCM growth within CMB, mainly in Hong Kong, as well as the favourable effects of currency translation. These increases were partly offset by lower revenue in Corporate Centre.
The company added the foreign currency translation decreased revenue by approximately 2% and earnings per share by approximately 1% for the quarter.
Foreign currency translation had an unfavorable impact of $5.5 million.
Total sales for the first quarter included 3.3% comparable growth, approximately 2% from acquisitions, and an approximate 2% negative impact from foreign currency translation. Net income for the first quarter was $160.3 million and earnings per share on a diluted basis were $1.09.
Foreign currency translation increased full year 2018 revenue by approximately 1% but did not have a significant impact on operating income or earnings per share.
Specifically, for Q4 2018, currency translation impact deprived the company USD 78 million in revenue, USD 25 million in EBITDA and USD 10 million in net income, again predominantly due to currency devaluation in Sudan from 18.3 to 46.2 (SDG / USD), a 60% decrease.
As a result of the transaction, in the third quarter, Cliffs will be recording a reversal of its currency translation adjustment, which will result in a positive con-tribution to net income of approximately $230 million, or income of approximately $0.75 per diluted share.