Definition for : Translation
Translation is the conversion of the accounts of foreign subsidiaries into the currency of the Parent company. Fluctuations in exchange rates and differences in Inflation rates may Lead to the distorted presentation of foreign accounts in Consolidated accounts. The major methods of translation are the Closing rate method, Temporal method, and special metgn currency items on the Balance sheet; these foreign exchange fluctuations are not Offset by Balance sheet items in the same currency.
(See Chapter 6 Getting to grips with consolidated accounts of the Vernimmen)
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