Consolidation (EC-CS)

The difference resulting from currency translation for any of the following reasons:

• Changes to the currency's exchange rate over the course of time, for example between two balance sheet report dates
• The use of different exchange rates for various balance sheet items and income statement items, for example:
• the historical rate for investments and investee equity
• the current rate for the remaining balance sheet and income statement items
• the average rate for revenue and expense items
• the current rate for appropriations of retained earnings

Currency translation differences must be taken into account in translated financial statements - otherwise the balance sheet will not be balanced. Currency translation differences can be posted with or without an effect on net income, depending on which differential items you choose.