Translation of IFRS: Language as a barrier to comparability

This study examines the translation of International Financial Reporting Standards (IFRS) from the official English version into Spanish by Mexican professional accountants. The use of IFRS in languages other than English creates the potential for translation differences that may introduce variation in accounting outcomes when different languages are used. In particular, given the move toward principles-based standards, with the corresponding increase in the proportion of generic phrases, the consistent translation of these terms is likely to become increasingly important. Thirty-eight participants translated (from English to Spanish) a total of 47 phrases excerpted from five different IFRS. Consistent with our hypotheses, we find that translations of accounting-specific phrases have less variation in translation than generic phrases, as exhibited by greater inter-rater agreement and lower relative dispersion.