Importance of Terminology Management in Translating Financial Content
Translation of terms and terminology consistency are major concerns when translating highly specialized and professional content like financial texts and specifically, when translating financial statements.
Terminology consistency mainly refers to:
- Intra-document consistency: When translating financial statements, terms referring to financial statement items, measurement criteria and accounting standards used must be consistent in the whole document. In particular, the financial statement items in the financial statement layouts are described in greater detail in the explanatory notes and it is important that the translation used is the same when referring to these items.
- Inter-document consistency: Both financial statement terms and company-related terminology must be consistent in all IR documentation, including: annual financial reports, half-year reports and quarterly reports.
- Consistency with IFRS: Terminology used in the translation of financial statements must comply with the International Financial Reporting Standards (IFRS) issued by the IASB, the International Accounting Standards Board, and endorsed by the European Union.
How can we ensure terminology consistency when translating financial content?
For inter-document and intra-document consistency of terminology, glossaries and translation memories can be of great help for consistency purposes.
Thanks to glossaries, translators will use the most common and strategic terms in a consistent manner. In this way, even if different translators are involved in the translation of IR documentation for the same client, the key terminology used will be the same. Terminology databases need to be constantly updated with client suggestions and new terms added to remain useful and up-to-date.
Terminology consistency is also guaranteed by the use of CAT tools when translating financial content. Translation memories are regularly updated in order to guarantee both inter-document and intra-document consistency and reduce quality inaccuracies. We always ask our clients for a feedback of our financial translations and implement changes in order to be in line with client expectations and auditing firms’ terminology requirements. Our translation memories always reflect clients’ changes and preferences.
Finally, as regards consistency with IFRS, the 2002 International Accounting Standards Regulation and its implementing acts endorsing International Financial Reporting Standards (IFRS) stipulate that EU firms listed on regulated markets must prepare their consolidated financial statements in line with international accounting standards. These are issued by an international private organization called the International Accounting Standards Board (IASB) and must go through due process of endorsement before becoming law in the EU.
As IFRS are translated in all EU official languages, and all the language versions are equally legally binding, it is very important that translators are acquainted with IFRS terminology and translate their financial documents in compliance with them. Amendments to IFRS are also constantly issued and translators need to know how changes impacted on financial terminology so as to offer translations that are always up to date from a terminological point of view.
Financial texts also need to be consistent as to dates and currency formats. The format used for dates changes according to the country of origin (e.g. US American English: December 31, 2014 vs. British English: 31 December 2014). Once one of these formats is chosen, it is important to guarantee consistency throughout the whole document and always use the same format.
Currency indicators also need to be consistent throughout the entire text. We usually apply ISO codes for currency in our translations (e.g. EUR, USD, CHF, etc.), but we also follow our customers’ indications and preferences if required. For example, currency can be expressed in financial texts with a symbol (€, $, £, etc.) or in an extended form (e.g. Euro + amount).
We cannot avoid considering the great importance of numbers in the translation of financial texts, especially in financial statements. It is fundamental that no numbers are added, omitted, changed, or moved. Punctuation and annotation systems in the target country are also to be considered, as the period/decimal system can change. For example, in the English-speaking world, a comma is used as thousand separator and the period is a decimal separator, while in the Italian-speaking world a period is used to separate groups of thousands and a comma is used to indicate the decimal place.
When translating financial content, management of terminology and using consistent terminology is extremely important. It is crucial that your language service provider, translators and reviewers provide high quality terminology management services to accurately and truly represent all language versions of your financial content. Working with an experienced financial language services provider is equally important.
Based in Milan, Cinzia Pizzinato is a Senior Translator and Reviewer at Welocalize’s Italian-based provider, Agostini Associati.
For more information on Welocalize Financial Translation Services, click here
Further Reading: International Accounting Standards and Financial Translations