Translation of balance sheets, income statements and cash flow statements

The three primary financial statements (the statement of financial position, the income statement and the cash flow statement) are the foundation of a company's financial picture. It is on these tables that a bank's credit committee, a foreign head office, an investor or a tender commission bases its decision. The translation of these documents differs from any other text: there are few words here, but each of them is the name of a standardised line item with one correct equivalent, while the figures, totals and table structure must be carried over with the same precision as the text.

The balance sheet: the statement of financial position

In modern IFRS terminology the balance sheet is called the "statement of financial position", although in practice "balance sheet" is used just as widely, and Georgian has a third variant, "sabalanso utskisi". The translator must know that these terms denote the same document, and use in the translation the variant that matches the receiving party's standard.

The balance sheet line items whose translation most often requires subject-matter knowledge:

• Current and non-current assets: the criterion for the split is the 12-month period, and the term "short-term" is wrong here
• Property, plant and equipment: the literal Georgian rendering "property, factory and equipment" is not used in Georgian statements, where the fixed term is "dziritadi sashualebebi"
• Intangible assets and goodwill
• Inventories and trade and other receivables
• Provisions: on the balance sheet this is a type of liability, and not a "regulation"
• Deferred tax asset and liability
• Share capital, share premium, retained earnings
• Non-controlling interest in consolidated statements

The income statement

The income statement (profit and loss statement) under IFRS is often presented as the "statement of profit or loss and other comprehensive income". In the translation it is important to distinguish clearly between the levels of profit, because each of them expresses a different financial indicator:

• Revenue: income from the principal activity
• Cost of sales / cost of goods sold
• Gross profit
• Operating profit and EBITDA, which usually stays as an abbreviation in Georgian statements too
• Finance income and finance costs
• Profit before tax and income tax expense
• Net profit for the year
• Other comprehensive income and earnings per share

Always translating "income" as "revenue" or "earnings" is one of the typical errors: "net income" in US statements is net profit and not "net revenue", while "income tax" is corporate profit tax and not personal income tax when the subject is a company.

The cash flow statement

The cash flow statement is divided into three parts, and in the translation the names of all three must strictly correspond to the IFRS (IAS 7) terminology:

• Cash flows from operating activities
• Cash flows from investing activities
• Cash flows from financing activities

Separate attention is required by the indication of the method: the direct method and the indirect method, as well as line items such as cash and cash equivalents, changes in working capital and depreciation and amortisation, where Georgian practice assigns depreciation to property, plant and equipment and amortisation to intangible assets.

Figures and format: where the error hides most often

In the translation of financial statements a linguistic error is rare, a format error frequent. The separate numerical check stage in the financial and business translation practice covers exactly these risks:

• Thousands and decimal separators: the English-language format 1,250,000.50, the European 1.250.000,50, Georgian practice often 1 250 000,50. In the translation one format agreed in advance is used
• Negative figures: in brackets (12,500) or with a minus sign -12,500, according to the convention of the original
• Indication of the unit: "in thousands of GEL" in the table heading must be carried over without fail, otherwise the figures change a thousandfold
• Reporting periods: the order of the columns (current year, previous year) and the date format (31 December 2025 / 31.12.2025 / December 31, 2025)
• Checking the totals: every subtotal and total is verified one by one against the original, so that not a single cell is lost when the table is carried over

In what format we receive and return the document

Financial statements often come as Excel tables, as PDFs exported from accounting software or as scanned, stamped documents. In the case of Excel the translation is done in the same file, with the same cell structure, so that the formulas and links are not broken. For PDFs and scanned forms we fully restore the table structure, and we prepare a translation to be notarized with page-by-page correspondence to the original.

Who needs balance sheet translation

• companies with foreign capital that send quarterly or annual statements to the head office for consolidation
• companies applying for a loan or credit line from a foreign bank or an international financial institution
• export companies whose foreign partner or supplier carries out a financial check of the counterparty
• companies taking part in international tenders, where the financial statements of recent years are a qualification requirement, often together with the audit report
• companies that present a business plan to an investor and attach historical statements as the basis of the forecasts
• foreign companies registering a branch, subsidiary or joint venture in Georgia and submitting statements translated into Georgian

Frequently asked questions