Do I need to translate the annual accounts?

by Target Language Translation Services

- January 04 2022

We’ve almost arrived at the moment numerous companies have been waiting for: the filing of their annual accounts. It’s a good idea to file these, especially if you want to avoid some nasty fines. All companies are required to file their annual accounts and all related documents in one of the official languages of the region where the company is established.

It is the law in relation to the use of languages in official documents that forms the basis for this.

In Flanders documents must be in Dutch, in the Walloon Region in French or, possibly German. In the Brussels Region one can choose between Dutch and French, but once chosen one must be consistent. All documents submitted must then be in the same language.

But, it is now also possible - as an addition - to submit a translation of all these documents in one or more of the official languages.

When a company goes through the internationalization process to reach new markets, it needs to take actions such as opening new offices overseas, or forming mergers or partnerships with new companies, etc. These activities compel companies to disclose their financial information in other languages - and this in turn has led to an increase in the demand for translating annual accounts.

About Annual Accounts

Annual accounts, as their name suggests, are documents that pull together a company's financial information, and the financial decision-making process is based on the information they contain. The information is aimed at those who want to find out about the company's present financial position and the course it's taking. It is a tool for assessing a business' overall position as well as any developments that may have occurred over the year. Annual accounts are made up of the balance sheet, profit and loss account, statement of changes in equity, cash flow statement, and a report. All commercial companies are required to file them.

Specific Characteristics

It's vital to remember that annual account translation is a specialist area with its own peculiarities:

Depending on the language combination, translators may need to adapt the numerical values. In Spanish, thousands are represented with a point, whereas in English a comma is used. Other languages have their own ways of representing figures, and an error made in transposing the figures could lead to a serious translation mistake.

Due to the nature of the content documents can often contain complex formatting, which must always be maintained in the translated document.

Translators should be used to working with specific terminology, as well as financial and accounting concepts and standards. This is why they should be specialist professionals, experienced in translating financial documents.

It's also significant to think about whether a certified translation is needed, for instance when the annual accounts have been prepared in a language other than the official language of the country they'll be submitted in. If a certified translation is required, it's essential to communicate this as soon as possible, as not all translators are qualified to do them.

Steps of Translating Annual Accounts

You might ask how you can go about translating your company’s annual accounts. The first and most important thing is to find translators who specialize in financial information to perform this task.

When looking for a translator specialized in the financial field, it’s best to find a translation company, since they have a wide range of professionals in the field.

In addition, a translation agency will follow the International Financial Reporting Standards (IFRS), which are the international standards governing accounting used in many parts of the world.

A translation agency works like so-called “translation memories”, creating a linguistic database that stores all translated content. In this way, previous translations can be leveraged when performing successive translations on the same topic.

This article is reprinted from okodia, AT Language Solutions and SEEDS of LAW.

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