The purpose of this paper is to examine translation in the context of International Financial Reporting Standards (IFRS) by taking the example of the English term “impairment” in IAS 36, and following it into 19 translations. The paper then examines the terms used for impairment in English translations of annual reports provided by firms. Consideration is given to the best approach for translating regulations and whether that is also suitable for the translation of annual reports.
The two empirical parts of the paper involve: first, identifying the terms for impairment used in 19 official translations of IAS 36, and second, examining English-language translations of reports provided by 393 listed firms from 11 major countries.
Nearly all the terms used for “impairment” in translations of IAS 36 do not convey the message of damage to assets. In annual reports translated into English, many terms are misleading in that they do not mention impairment, peaking at 39 per cent in German and Italian reports in one year.
Researchers should note that the information related to impairment in international databases is likely to contain errors, and the authors recommend that data should be hand-collected and then carefully checked by experts. The authors make suggestions for further research.
Translators of regulations should aim to convey the messages of the source documents, but translators of annual reports should not look only at the reports but also consult the terminology in the original regulations. The authors also suggest implications for regulators and analysts.
The paper innovates by separately considering regulations and annual reports. The authors examine a key accounting term systematically into a wide range of official translations. The core section of the paper is a new field of research: an empirical study of the translations of firms’ financial statements.
The authors are grateful for comments on previous drafts from Holger Daske, Lisa Evans, Elena Giovannoni, Erlend Kvaal, Richard Macve, Steve Young, Stephen Zeff and workshop participants at the 2018 British Accounting and Finance Association Annual Conference and the 2018 European Accounting Association Annual Congress. The authors are also grateful for suggestions from two reviewers of this journal and from the editor who handled the paper, Rania Kamla. The authors acknowledge translation and other assistance from Abdullah Almulhim, Mohammed Alomair, Aysha AlSalih, Jörgen Dahlgren, Jürgen Ernstberger, Isabel Lourenço, Jérémy Morales, Sven-Arne Nilsson, Takatsugu Ochi, Sang-Eun Park, Jon Rowden, Chungwoo Suh, Satenik Vanyan, Piotr Zegarlinski, Geert Wognum and Na Zhao. The support of the ICAEW’s charitable trusts is gratefully acknowledged.
Nobes, C. and Stadler, C. (2018), "Impaired translations: IFRS from English and annual reports into English", Accounting, Auditing & Accountability Journal, Vol. 31 No. 7, pp. 1981-2005. https://doi.org/10.1108/AAAJ-06-2017-2978Download as .RIS
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