Understanding earnings vs. profit

10:48 Sep 1, 2018 

OK, thanks for all the insight. Yes, I've already found out about the difference between IFRS and HGB (thanks to the great archive of questions here on proz) - mine's HGB. I guess I'll just need a little more practise until I feel familiar with all these terms and can safely judge which is correct in which context. Good idea about looking at the Siemens accouunts, will do that. Many thanks again to everyone for your help.

23:05 Aug 31, 2018 

For a 'British' perspective this may only add to confusion, but it also illustrates some of the interchangeability of the terms with regard to describing income/earnings/profit, notably 'operating profit' = EBIT = PBIT. Depends on who is using them and in what context. https://kaplan.co.uk/insights/article-detail/insights/2016/0... If I were unsure about terms I would take a look at a big listed company such as Siemens and compare the usage in their German language and English language accounts - https://www.siemens.com/investor/pool/de/investor_relations/... and https://www.siemens.com/investor/pool/en/investor_relations/...

12:35 Aug 31, 2018 

As you are new to accounting translations, also be aware that there are differences between IFRS English and UGB/HGB English. While many German items have the same English name, many do not as IFRS terms are "original English" but UGB/HGB English is set by the DRSC and IDW and the "official" translation published by them.

Use the ABRA XBLR Taxonomies to find the appropriate English translations for the accounting standards applicable to your project.

https://www.abra-search.com

12:29 Aug 31, 2018 

As a former US accountant, I can tell you that many accounting terms are simply historical conventions that have become standard over the years. In most cases there is no substantive difference in meaning between "earnings" and "profit" in English accounting speak.

Unlike in German, where many terms are defined in law, Anglo-American accounting terminology and usage has developed organically over time.

I remember as an accounting student asking my professor a similar question about the terms used in a chart of accounts. His response was "Because those are the account names the author of the textbook learned. When you go to work, you may find different terms for different companies. They all mean the same thing."

So the best advice is simply to learn these standard phrases and terms and not worry about it.

One would never say "profit per share" for "earnings per share" as EPS is the accepted convention.

A similar situation arises for "gain/loss" items versus "income/loss" in items such a "translation gains" or "disposal gain". Yes, "income on disposal" would mean the same thing, but that is not the term of art.