Certified translations
Certified translations of financial statements play a very important role in today’s globalised world. Companies operating on international markets have to adapt their financial documents to the legal requirements and accounting standards of different countries. We have written about other types of financial translations in articles here. With certified translations, companies can ensure that their financial statements comply with local regulations, which is crucial for maintaining transparency and trust with business partners and investors. To begin with, however, it is important to clarify what exactly financial statements are.
What are financial statements?
Financial statements are a document showing the financial performance of a company over a specified period. They contain information on revenues, expenses, profits, assets, liabilities and other key financial aspects. Most commonly, they consist of the following elements:
- Balance sheet – shows the company’s assets at a given point in time, including assets, liabilities and equity.
- Profit and loss account – shows the company’s income and expenditure over a given period, which allows the company’s profitability to be assessed.
- Cash flow statement – presents information on the cash flow of the company.
- Statement of changes in equity – documents the changes in the capital structure of the company.
All these documents play a key role in managing the company, assessing its financial stability and attracting investors. Translations of these documents into foreign languages are essential in situations where a company cooperates with foreign partners, operates internationally or needs to present its financial results to institutions outside the country.
Why should financial statements be translated as certified translations?
Certified translations of financial statements are not only a legal requirement, but are also crucial to ensure compliance and transparency in the international exchange of economic information. A certified translator acts as an intermediary to ensure that the content of the financial statements is faithfully rendered in another language, preserving their true meaning, precision and compliance with applicable regulations.
In practice, certified translations of financial statements are required in the following situations:
- International transactions – Companies that transact with foreign entities must provide their financial statements in the language of a specific country.
- Submissions to regulators – In some countries, such as the European Union, companies must submit their financial statements as certified translations to comply with regulatory requirements.
- Cooperation with international financial institutions – Entities such as banks, investors or auditors require certified translations of financial statements for credit assessment or investment analysis purposes.
- Preparation for public trading of securities – Companies planning to enter a stock exchange must provide certified translations of their financial statements to comply with transparency requirements towards investors.
Certified translations of financial statements are particularly important for several reasons:
- Accuracy of terminology – Financial statements contain specialised terminology that must be faithfully translated to avoid misunderstandings or misinterpretations. Even small errors in translation can lead to serious legal or financial consequences.
- Credibility and legality – A certified translation is a form of guarantee that a document has been faithfully translated and is true to the original. Only a certified translator has the authority to certify the authenticity of a translation, which is important in a formal context, especially in court proceedings or before public administration bodies.
- Compliance with legal standards – Financial statements must be prepared in accordance with applicable accounting standards, such as International Financial Reporting Standards (IFRS) or National Accounting Standards. A certified translator is required to be familiar with these standards and apply them when translating documents.
The translation of financial statements, especially certified translations, requires the translator not only to have knowledge of the language, but also a sound knowledge of finance and law. The translator must be able not only to translate the words, but also to understand the context and specifics of the document in question. He or she should also be familiar with financial terminology and accounting regulations in different countries, and have exceptional accuracy and attention to detail in order to accurately translate information and figures.
In summary, certified translations of financial statements are an essential element in international business, ensuring accurate and legally compliant communication of financial information. They enable companies to communicate effectively with international partners, financial institutions and regulatory authorities. Professional translations, carried out by experienced certified translators, ensure that these documents maintain full compliance with applicable accounting standards and legislation. Choosing the right translator is crucial to avoiding mistakes that could have serious financial and legal consequences.