Translation vs. Remeasurement — What's the Difference?

Used in corporate accounting to integrate foreign operations’ results.

The adjustment of financial statements from one currency to another when currencies fluctuate.

The process of converting the financial statements of one currency into another to reflect changes in exchange rates.

Required when the functional currency is different from the local currency.

Essential for companies with international operations to report accurately.

Aligns the books of foreign subsidiaries with the parent company’s reporting currency.

Involves applying specific accounting rules to maintain consistency.

Directly impacts the income statement by reflecting gains or losses.

Affects the equity section of the balance sheet through other comprehensive income.

Critical for accurate financial representation in volatile currency environments.

Translation is the communication of the meaning of a source-language text by means of an equivalent target-language text. The English language draws a terminological distinction (which does not exist in every language) between translating (a written text) and interpreting (oral or signed communication between users of different languages); under this distinction, translation can begin only after the appearance of writing within a language community.

Measurement again or anew

The act or process of translating, especially from one language into another.

The state of being translated.

A translated version of a text.

(Physics) Motion of a body in which every point of the body moves parallel to and the same distance as every other point of the body.

(Biology) The process by which messenger RNA directs the amino acid sequence of a growing polypeptide during protein synthesis.

The act of translating, in its various senses:

The conversion of text from one language to another.

(translation studies) The discipline or study of translating written language (as opposed to interpretation, which concerns itself with spoken language).

The conversion of something from one form or medium to another.

A motion or compulsion to motion in a straight line without rotation or other deformation.

(mathematics) A relation between two mathematical figures such as a straight line where the coordinates of each point in one figure is a constant added to the coordinates of a corresponding point in the other figure.

(genetics) The process whereby a strand of mRNA directs assembly of amino acids into proteins within a ribosome.

(physics) A transfer of motion occurring within a gearbox.

The automatic retransmission of a telegraph message.

The conveyance of something from one place to another, especially:

(countable) The product or end result of an act of translating, in its various senses.

The act of translating, removing, or transferring; removal; also, the state of being translated or removed; as, the translation of Enoch; the translation of a bishop.

The act of rendering into another language; interpretation; as, the translation of idioms is difficult.

That which is obtained by translating something a version; as, a translation of the Scriptures.

A transfer of meaning in a word or phrase, a metaphor; a tralation.

Transfer of meaning by association; association of ideas.

Motion in which all the points of the moving body have at any instant the same velocity and direction of motion; - opposed to rotation.

A written communication in a second language having the same meaning as the written communication in a first language

A uniform movement without rotation

The act of changing in form or shape or appearance;

(mathematics) a transformation in which the origin of the coordinate system is moved to another position but the direction of each axis remains the same

(genetics) the process whereby genetic information coded in messenger RNA directs the formation of a specific protein at a ribosome in the cytoplasm

Rewording something in less technical terminology

The act of uniform movement

Translation is used when the subsidiary’s operations are primarily in its local currency, which is considered the functional currency.

Yes, translation adjustments are recorded in other comprehensive income, affecting the equity section of the balance sheet.

Remeasurement adjusts financials to reflect current exchange rates, directly impacting net income, whereas translation affects comprehensive income.

Remeasurement results in immediate recognition of gains or losses in the income statement.

To convert financial statements from a foreign currency into the parent company’s currency for reporting purposes.

Both processes are governed by ASC 830, which provides guidelines for currency conversion in financial reporting.

Remeasurement is necessary when the local currency is not the functional currency, such as in countries with unstable economies.

Remeasurement primarily impacts the income statement through the immediate recognition of currency gains or losses.

The current exchange rate is used for the balance sheet, and the average rate is used for the income statement.

It ensures that financial statements reflect the true value of monetary items in fluctuating currency conditions.

The choice of functional currency determines whether remeasurement or translation is necessary based on the reporting requirements.

Companies must frequently adjust their financial statements to reflect the volatile changes in the value of the local currency.

Translation integrates the financial statements of foreign subsidiaries, reflecting a unified financial position in the parent company’s currency.

Multinational corporations with subsidiaries operating in different currencies need to perform translation for consolidation.

Yes, industries like international banking, oil and gas, and multinational manufacturing often require translation for their global operations.