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principio di prudenza e di competenza economica

English translation: principle of prudence and accrual basis accounting

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GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
Italian term or phrase:principio di prudenza e di competenza economica
English translation:principle of prudence and accrual basis accounting
Entered by: Lexi-tech
Options:
- Contribute to this entry
- Include in personal glossary

16:13 Mar 7, 2003
Italian to English translations [PRO]
Bus/Financial / Notes to financial statements
Italian term or phrase: principio di prudenza e di competenza economica
In notes to financial statements, statement that "
ricavi ed i costi resultano determinati secondo il principio di prudenza e di competenza economica"
Lexi-tech
Local time: 08:33
principle of prudence and of accrual basis accounting
Explanation:
Prudence is fine for "prudenza", meaning no spendthrift behavior!
However, "competenza economica" refers to accrual basis accounting, as opposed to cash basis accounting.
You can find confirmation of this meaning of "competenza economica" in any good Ital/Eng financial dictionary. My own reference is Codeluppi.

The idea is that expenses and income are posted in the books when incurred ("nel periodo di competenza"). As a result, if you invoice someone in June, it gets posted in June, even though you may not get the money until September.

For an English explanation of the concept:

accrual basis accounting
The most commonly used accounting method, which reports income when earned and expenses when incurred, as opposed to cash basis accounting, which reports income when received and expenses when paid. Under the accrual method, companies do have some discretion as to when income and expenses are recognized, but there are rules governing the recognition. In addition, companies are required to make prudent estimates against revenues that are recorded but may not be received, called a bad debt expense.
Selected response from:

Catherine Bolton
Local time: 15:33
Grading comment
Thanks for this, and for your prompt response. I sent it just before lunch with a client local time and have just come back. I already had the "accrual" aspect; what I needed was how to incorporate the "prudenza".
Alex MacQuarrie
4 KudoZ points were awarded for this answer



Summary of answers provided
5 +3principle of prudence and of accrual basis accounting
Catherine Bolton
5(in accordance with the) principle of prudence on an accruals basis
Giles Watson
4 +1according to good accounting practices/principles.
Kaiserina
4in accordance with the principles of prudence and competence
Emanuela Corbetta
4prudence concept and matching concept
Angela Monetta
4prudence concept and matching concept
Angela Monetta
3based on a principle of economic rationality and expertise
Elena Ghetti


Discussion entries: 1





  

Answers


9 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
based on a principle of economic rationality and expertise


Explanation:
costs and revenues (or whatever other words you want to use) have been found to be in line with a rational and sound economic guidelines/principles

I am sure you can find a better wording

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Note added at 2003-03-07 16:23:39 (GMT)
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or rational and sound economic management

Elena Ghetti
Italy
Local time: 15:33
Native speaker of: Native in ItalianItalian
PRO pts in pair: 750
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9 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +1
according to good accounting practices/principles.


Explanation:
profits (revenue) and costs appear to have been determined according to good/sound (and competent) accounting principles.

i've seen "sound accounting principles/practices" quite a bit lately. cmq the turn of the phrase è quello.

--------------------------------------------------
Note added at 2003-03-07 16:32:04 (GMT)
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p.s. i\'ve been looking for an italian version of this statement--now i have one!

the competent is optional--i wouldn\'t put it.

according to sound accounting principles. GAAP is generally accepted accounting principles, but i think they\'re trying to go beyond that. anyways, take a look at this page, and you\'ll get a lot of options:

http://www.quickmba.com/accounting/fin/


Kaiserina
Canada
Local time: 08:33
Native speaker of: English
PRO pts in pair: 341

Peer comments on this answer (and responses from the answerer)
agree  Elena Ghetti: yes, that's better
1 min
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12 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5
prudence concept and matching concept


Explanation:
from Eurodicautum

Angela Monetta
Italy
Local time: 15:33
Native speaker of: Italian
PRO pts in pair: 15

Peer comments on this answer (and responses from the answerer)
neutral  Kaiserina: that's not it at all. Eurodicautum leaves much to be desired in the realm of financial translation.
13 mins
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13 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5
prudence concept and matching concept


Explanation:
from Eurodicautum

Angela Monetta
Italy
Local time: 15:33
Native speaker of: Italian
PRO pts in pair: 15
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16 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5
in accordance with the principles of prudence and competence


Explanation:
....


    Reference: http://www.lottomatica.it/file_en/pdf/consolidato.pdf
Emanuela Corbetta
Local time: 08:33
Native speaker of: Native in ItalianItalian
PRO pts in pair: 127
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27 mins   confidence: Answerer confidence 5/5 peer agreement (net): +3
principle of prudence and of accrual basis accounting


Explanation:
Prudence is fine for "prudenza", meaning no spendthrift behavior!
However, "competenza economica" refers to accrual basis accounting, as opposed to cash basis accounting.
You can find confirmation of this meaning of "competenza economica" in any good Ital/Eng financial dictionary. My own reference is Codeluppi.

The idea is that expenses and income are posted in the books when incurred ("nel periodo di competenza"). As a result, if you invoice someone in June, it gets posted in June, even though you may not get the money until September.

For an English explanation of the concept:

accrual basis accounting
The most commonly used accounting method, which reports income when earned and expenses when incurred, as opposed to cash basis accounting, which reports income when received and expenses when paid. Under the accrual method, companies do have some discretion as to when income and expenses are recognized, but there are rules governing the recognition. In addition, companies are required to make prudent estimates against revenues that are recorded but may not be received, called a bad debt expense.



    Reference: http://www.investorwords.com/cgi-bin/getword.cgi?61
Catherine Bolton
Local time: 15:33
Native speaker of: Native in EnglishEnglish
PRO pts in pair: 1906
Grading comment
Thanks for this, and for your prompt response. I sent it just before lunch with a client local time and have just come back. I already had the "accrual" aspect; what I needed was how to incorporate the "prudenza".
Alex MacQuarrie

Peer comments on this answer (and responses from the answerer)
agree  Mary Consonni
3 mins
  -> Thank you, Mary!

neutral  Kaiserina: in codeluppi it says "contabilità basata sul periodo di competenza" for accrual basis accounting. competenza di contabilità and competenze ecnomiche sono due cose diverse, secondo me.
5 mins
  -> Hate to tell you, but it's the same thing. I do lots of financial statements and this IS the correct term.

agree  Birch: I agree. I used to work as a public sector accountant in the UK and principle of prudence and accrual based accounting are definitely the terms which are used.
29 mins
  -> Thanks Birch!

agree  Eva Blanar
1 hr
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32 mins   confidence: Answerer confidence 5/5
(in accordance with the) principle of prudence on an accruals basis


Explanation:
If you google around for "accruals basis", you'll find plenty of explanations in English of "competenza economica". There's an example below.

The principle of prudence is highly recommended by accounting bodies everywhere!

HTH

Giles


    Reference: http://www.nuneatonandbedworth.gov.uk/council/spending/soa01...
Giles Watson
Italy
Local time: 15:33
Native speaker of: Native in EnglishEnglish
PRO pts in pair: 1718
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