Lost in Translation Ever been to a place where you don’t understand the language of the people around you? A place where you’re native language and their native language doesn’t meet. There are a lot of reasons why not knowing how to speak the language of the place you are staying can be exhausting. One of the reasons is for practicality. When you can’t speak the language, you’ll feel really useless because basically, you can’t communicate what you want. I experienced that firsthand while I was in Japan. I was in a shop in Japan and was looking through their items. I saw a coat and I really like it so I checked the price. It cost a lot but I think it was on sale, so I approach a saleslady. But apparently, the lady cannot speak English and I’m not that fluent in Japanese. So I ended up looking for my cousin just to ask him what the saleslady said. Did I mention my cousin was a 12 year-old? He grew up in Japan so he practically speaks the language half of his life. I often have a hard time speaking to him too. So, basically, language barrier can affect our lives in so many ways. Consequently, different language also means different currency. And because of globalization, the companies expand their business in different parts of the world. As a result, a company will have a subsidiary with a different functional currency. This subsidiary will have to be translated to the functional currency of its parent for the purpose of consolidation.

The article discussed about the 3 most common mistakes by accountants in translating the financial statements of subsidiary with a different functional currency. The first mistake mentioned in the article is when accountants hide the foreign currency gains or losses in other comprehensive income instead of presenting it in the net income. An example given was about the intercompany receivables and payables recorded on the