One of the primary challenges in Banking and Finance Translation is dealing with specialized terminology.
Navigating the world of Banking and Finance terminologies can be quite challenging. Efforts have been made to standardize financial language and improve transparency in financial reporting, such as the establishment of the International Accounting Standards (IAS) in 1973.
Regardless, financial reporting and translation remain an area of difficulty, even for professional translators and finance companies around the world. A look at the English version of the annual reports of major listed firms reveals many inconsistencies in the use of terms, mainly due to misleading translations.
For example, a study investigates the English translations of the annual reports from 393 listed firms in 11 countries. It looks at how the financial concept loss of value due to damage or changes in circumstances – impairment is translated from different languages into English.
Findings show that most translations did not use the correct term “impairment” to denote this financial concept. Indeed, many translations were misleading.
Particularly, in Carrefour’s 2006 Financial Report, multiple terms are used to denote “impairment” within a single translated document. The Property, Plant and Equipment (PPE) note on page 96 uses “write-down,” the table on page 97 mentions “depreciation,” and the PPE policy note on page 79 simply refers to “loss in value.”
At a glance, “impairment” and “depreciation” may be similar in meaning, which is likely the cause of confusion for translators. However, it is important to note they are two separate financial terms that should not be used interchangeably. “Impairment” is measured based on a decline in value but signifies damage as the economic event. On the other hand, “depreciation” is measured considering the eventual expected residual value, with the economic event being the passage of time or gradual wearing out.
This example illustrates the complexities of Banking and Finance terminologies. Translators of financial content should have a deep understanding of financial terminologies in order to distinguish between nuanced financial concepts and use the correct terms to maintain the accuracy and integrity of financial translations.