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Glossary entry

German term or phrase:

Abschreibungen auf Finanzanlagen

English translation:

Amortization of financial assets

Added to glossary by Alison Schwitzgebel
Mar 30, 2002 16:54
22 yrs ago
16 viewers *
German term

Abschreibungen auf Finanzanlagen

German to English Bus/Financial Accounting P&L accounting
Context: income statement (P&L).

There is one item entitled "Abschreibungen auf immaterialle Vermögensstände des Anlagevermögens und Sachanlagen" (depreciation of tangible fixed assets and amortization of intangible fixed assets),
but this is a separate item entitled "Abschreibungen auf Finanzanlagen und auf Wertpapere des Umlaufvermögens."

My question is whether depreciation or amortization is the right term for financial assets and securities in current assets, or if devaluation or write-off would be more appropriate.

Any input much appreciated.
Thanks, Beth
Proposed translations (English)
4 +2 Amortization of financial assets and marketable securities
4 +2 investment write-offs
4 write-down
5 -1 Beth, you put two things the other way around, change it!!!
5 -2 write-off on financial assets
4 -2 depreciation of financial assets
4 -2 depreciation
4 -2 depreciation of non-trading assets/investment securities
Change log

Jan 31, 2011 08:55: Steffen Walter changed "Field (specific)" from "(none)" to "Accounting"

Proposed translations

+2
15 hrs
Selected

Amortization of financial assets and marketable securities

Hi Beth!

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Note added at 2002-03-31 08:15:13 (GMT)
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Oops, hit return too soon...

This is a tough one. You probably won\'t find a good explanation in any dictionary - it\'s a case of pure accounting-speak. Depreciation is always used for tangible assets, amortization for intangible assets. As financial assets and securities are intangible (you can\'t kick \'em), they are always amortized.

I\'m taking a guess that it\'s US GAAP accounting here, as \"Wertpapiere des UV\" is a commonly used German term in US GAAP accounts, so the standard translation of that term is \"marketable securities\" (Wiley: US GAAP 2001).

Check out:
http://www.gs.com/recruiting/asiapacific/glossary/index_u.ht...

\"Amortisation: expense relating to write-off of intangible assets, most commonly goodwill \"

There is also a BIG difference between a write-off (complete devaluation) and a write-down (e.g. part of the value due to impairment).

Kathi has admittedly found a source for \"depreciation of securities\", but this is not standard usage.

As I said, this is one that you won\'t find in any dictionary or text book - I guess you just have to trust me.....

Okay, shoot me down guys!

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Note added at 2002-03-31 08:17:09 (GMT)
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Hmm, maybe my point about write-offs and write-downs is confusing - if you write-down an asset sufficiently (either on one or several occasions), then it is written off.
Peer comment(s):
agree Dr Janine Manuel BSc BHB MBChB
4 hrs
agree gangels (X) : Let's have a party, blow the money and THEN decide whether it should be depreciated, amortized, written off, written down (or the whole thing WRITTEN UP TO EXPERIENCE).
4 hrs
So where's the party?
Something went wrong...
4 KudoZ points awarded for this answer. Comment: "What a debate - thanks to everyone for your help. "
-2
8 mins

depreciation of financial assets

that's the term

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Note added at 2002-03-30 17:44:30 (GMT)
--------------------------------------------------

I just looked it up on Schäfer Wortschaftswörterbuch...it states: depreciation on financial assets: Abschreibung auf Finanzanlagen

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Note added at 2002-03-30 18:01:09 (GMT)
--------------------------------------------------

some more explanation found:
depreciation; amortization; write-off / Abschreibung / amortissement / ammortamento economico
Depreciation: the decrease in value of an asset through wear and tear or other factors limiting its usefulness. Fixed assets are depreciated in accounts by regularly reducing their book value in the balance sheet. Write-off: accounting process whereby a loan which is classified as a worthless asset has its status changed from an earning asset on the balance sheet and is charged to credit risk reserves. Amortization:
a) Banking the redemption of a loan by periodic payments of principal and interest.
b) Accounting a gradual reduction in the book value of goodwill and other intangibles.
Source: http://www.ubs.ch/e/index/about/bterms/content_a.html

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Note added at 2002-03-31 07:32:19 (GMT)
--------------------------------------------------

Since Steffen stated that depreciation is never used with securities....I found a web site that proves different...a corporation business report of KENWOOD. Here is the link: http://www.kenwood.com/i/corporate/e.html
Peer comment(s):
disagree Eva Blanar : There is no way to charge depreciation on financial assets.
36 mins
Eva, sorry, but you are wrong...Schäfer Wirtschaftswörterbuch states the above phrase
disagree Andy Lemminger : you never depreciate financial assets
4 hrs
I guess Schäfer Wirtschaftswörterbuch must have been entirely wrong!
agree Alev Ellington : My dictionary also says "depreciation" I guess Kathi is right.
5 hrs
agree gangels (X) : Eva, Andy: Did you ever own stocks? You'll learn quickly the facts of depreciation.
9 hrs
disagree Steffen Pollex (X) : depreciation is not a term used in connection with securities
13 hrs
Steffen.....Schäfer Wortschaftswörterbuch...it states: depreciation on financial assets: Abschreibung auf Finanzanlagen. I never thought this woul lead in so much controversy.
disagree Alison Schwitzgebel : no. Financial assets are intangible (you can't kick them) and as such area always amortized. I NEVER trust Schäfer - you may have found a site that uses depreciation with securities but it is certainly not the standard term.
15 hrs
but the site was not a translated site..it was presented by an US company.
Something went wrong...
-2
9 mins

depreciation

Woywode Wörterbuch für Rechnungslegung und Steuern.

I believe it is also IAS, though I dont have the bookfor this yet.

Even when it is 100 % depreciatd, and thus fully written off.


Peer comment(s):
disagree Andy Lemminger : you never depreciate financial assets
4 hrs
disagree Alison Schwitzgebel : not for intangibles
15 hrs
Something went wrong...
+2
16 mins

investment write-offs

In the case of bad debt or poorly performing investments the term "Abschreibungen" translates as write-offs.

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Note added at 2002-03-30 17:15:32 (GMT)
--------------------------------------------------

By way of reference check out my most recent translation entitled \"Instability in a stable environment: Japan\'s bad-loans problem\". You can find it at

http://homepage.mac.com/moogoonghwa

The translation has been read and approved by the author, who is the General Manager of Germany\'s second largest bank\'s Tokyo office.

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Note added at 2002-03-30 17:20:05 (GMT)
--------------------------------------------------

My comment to Alexander should have read \"not interchangeable\" rather than \"interchangeable\".
Peer comment(s):
agree Eva Blanar : Definitely a write-off in this case!
27 mins
agree GATI (X) : write-off is correct, since it applies to the intangible assets and capitalzied cost on investment. Depreciation is for fixed assets. But it can be confusing, because there are certain depreciations that do apply to the methods.
40 mins
agree Andy Lemminger : that's it, just read Kathi's definition in her note
4 hrs
agree ingot
7 hrs
disagree Chris Rowson (X) : This phrasing is used by journalists, but not in P&L reports. The Tokyo office of a German bank is not authoritative for English or American usage.
8 hrs
It is probably a better authority than the German office of a German bank. The international financial community in Tokyo is run by US financial houses. All of the reports that are translated from Japanese into English pass through a US language filter
disagree Alison Schwitzgebel : no, the assets are written down, not off!
14 hrs
Please see my note to Michael Sebold!
Something went wrong...
-2
18 mins

write-off on financial assets

This is the somewhat more American variation of depreciation,
Peer comment(s):
disagree Roddy Stegemann : In financial accounting language the terms "depreciation" and "write-offs" are interchangeable.
5 mins
disagree Alison Schwitzgebel : no, there's a difference between a write-down and a write off. Besides, it should be amortization.
14 hrs
Something went wrong...
-2
20 mins

depreciation of non-trading assets/investment securities

The terminology depends on the applicable accounting standards - I would use "non-trading assets" for accounting under German commercial law (HGB), "investments" or "investment securities" under IAS, and "investments and long-term financial assets" under US GAAP.
Peer comment(s):
disagree Andy Lemminger : but not "dpreciation" in the case of financial assets
3 hrs
disagree Alison Schwitzgebel : not depreciation for intangibles and financials. Should be amortization.
14 hrs
Something went wrong...
10 hrs

write-down

You might use "write-down" for financial assets that lose significant value, but which don't "disappear" from the from the books. See the links.

Reference:

http://www.ssb.no/regnno_en/tab-2001-09-13-01-en.html

http://www.inet.it/inglese/com_finanziari/31072000.html

Peer comment(s):
neutral Roddy Stegemann : The term with which I am most familiar in this context is "adjustments". I have seen the term write-downs on occasion, though.
35 mins
neutral Alison Schwitzgebel : write-down is okay in "Fließtext, but not as an item on the income statement.
5 hrs
Something went wrong...
-1
13 hrs

Beth, you put two things the other way around, change it!!!

If the German original is, as you state in the example to your question above, "Abschreibungen auf immaterialle Vermögensstände des Anlagevermögens und Sachanlagen", then in German, it is "depreciation of intangible fixed assets and amortization of tangible fixed assets."

You mixed up "tangible" and "intangible" here. HTH.

Abschreibungen auf Finanzanlagen und Werpapiere des Anlagevermögens"="write-offs of securities held for trading purposes and investment securities".


Reference:

own experience

Peer comment(s):
neutral Kathi Stock : depreciation of securities....see my link: http://www.kenwood.com/i/corporate/e.html
1 hr
disagree Alison Schwitzgebel : no, tangibles are always depreciated, intangibles are always amortized.
2 hrs
What I meant is that the German original puts intangible assets first and tangible second, Beth does the other way around. Agree with yout comment on amortization and depreciation, also "write-off" and "write-down".. Sorry
Something went wrong...
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