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Abschreibungen auf Finanzanlagen

English translation: Amortization of financial assets

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
German term or phrase:Abschreibungen auf Finanzanlagen
English translation:Amortization of financial assets
Entered by: Alison Schwitzgebel

16:54 Mar 30, 2002
German to English translations [PRO]
Bus/Financial - Accounting / P&L accounting
German term or phrase: Abschreibungen auf Finanzanlagen
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
Beth Kantus
United States
Local time: 05:28
Amortization of financial assets and marketable securities
Explanation:
Hi Beth!

--------------------------------------------------
Note added at 2002-03-31 08:15:13 (GMT)
--------------------------------------------------

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!

--------------------------------------------------
Note added at 2002-03-31 08:17:09 (GMT)
--------------------------------------------------

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.
Selected response from:

Alison Schwitzgebel
France
Local time: 11:28
Grading comment
What a debate - thanks to everyone for your help.
4 KudoZ points were awarded for this answer



Summary of answers provided
4 +2investment write-offs
Roddy Stegemann
4 +2Amortization of financial assets and marketable securities
Alison Schwitzgebel
4write-down
msebold
5 -1Beth, you put two things the other way around, change it!!!
Steffen Pollex (X)
5 -2write-off on financial assets
Alexander Schleber (X)
4 -2depreciation of financial assets
Kathi Stock
4 -2depreciation
Chris Rowson (X)
4 -2depreciation of non-trading assets/investment securities
Ralf Lemster


  

Answers


8 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): -2
depreciation of financial assets


Explanation:
that's the term

--------------------------------------------------
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

--------------------------------------------------
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

Kathi Stock
United States
Local time: 04:28
Works in field
Native speaker of: German
PRO pts in category: 11

Peer comments on this answer (and responses from the answerer)
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.
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9 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): -2
depreciation


Explanation:
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.




Chris Rowson (X)
Local time: 11:28
Native speaker of: Native in EnglishEnglish
PRO pts in category: 10

Peer comments on this answer (and responses from the answerer)
disagree  Andy Lemminger: you never depreciate financial assets
4 hrs
disagree  Alison Schwitzgebel: not for intangibles
15 hrs
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16 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +2
investment write-offs


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

--------------------------------------------------
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.

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

My comment to Alexander should have read \"not interchangeable\" rather than \"interchangeable\".

Roddy Stegemann
United States
Local time: 02:28
Native speaker of: Native in EnglishEnglish

Peer comments on this answer (and responses from the answerer)
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!
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18 mins   confidence: Answerer confidence 5/5 peer agreement (net): -2
write-off on financial assets


Explanation:
This is the somewhat more American variation of depreciation,

Alexander Schleber (X)
Belgium
Local time: 11:28
Native speaker of: Native in GermanGerman, Native in EnglishEnglish
PRO pts in category: 34

Peer comments on this answer (and responses from the answerer)
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
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20 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): -2
depreciation of non-trading assets/investment securities


Explanation:
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.


Ralf Lemster
Germany
Local time: 11:28
Native speaker of: German
PRO pts in category: 183

Peer comments on this answer (and responses from the answerer)
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
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10 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5
write-down


Explanation:
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
    Reference: http://www.inet.it/inglese/com_finanziari/31072000.html
msebold
Canada
Local time: 05:28

Peer comments on this answer (and responses from the answerer)
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
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13 hrs   confidence: Answerer confidence 5/5 peer agreement (net): -1
Beth, you put two things the other way around, change it!!!


Explanation:
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".





    own experience
Steffen Pollex (X)
Local time: 11:28
Specializes in field
Native speaker of: Native in GermanGerman, Native in RussianRussian
PRO pts in category: 36

Peer comments on this answer (and responses from the answerer)
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
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15 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +2
Amortization of financial assets and marketable securities


Explanation:
Hi Beth!

--------------------------------------------------
Note added at 2002-03-31 08:15:13 (GMT)
--------------------------------------------------

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!

--------------------------------------------------
Note added at 2002-03-31 08:17:09 (GMT)
--------------------------------------------------

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.

Alison Schwitzgebel
France
Local time: 11:28
Specializes in field
Native speaker of: Native in EnglishEnglish, Native in GermanGerman
PRO pts in category: 346
Grading comment
What a debate - thanks to everyone for your help.

Peer comments on this answer (and responses from the answerer)
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?
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