LANGUAGE FOR EXPERTISE: Equity is neither Capital nor Capitaux?

　

Equity is neither Capital nor Capitaux?
– Why Knowing the Word Isn’t Enough in Accounting Translation

When reading or translating corporate materials, one of the most common traps—no matter how fluent you are—is accounting terminology.

Even if you’re not a finance or international affairs expert, it’s surprisingly common to encounter documents that require you to interpret accounting-related language.

Accounting terms aren’t just about knowing words—they require a deep understanding of the structure and role of these words in context. Only then can you accurately capture the intended meaning.

Let’s explore this, starting with one of the most representative examples.

　

CASE 1: Is Capital the same as Equity?
The word capital might sound familiar, but in accounting, it’s far from straightforward.

From a company’s perspective, capital is the portion of the company that belongs to its owners.
It’s the amount remaining when you subtract liabilities from total assets.

But once you try to translate that concept into English, confusion begins.

The term capital in English can be translated into these terms:

• Capital
• Equity
• Net Worth

Which one is the correct choice?

A Simple Breakdown:

• Capital refers specifically to “share capital”—the amount initially invested by shareholders.
• Equity is a much broader term. It includes capital, but also retained earnings, revaluation reserves, and other adjustments.
• Net Worth is numerically similar to equity, but it’s more commonly used in personal finance or general financial discussions.

In French?
The standard French term for equity is Capitaux propres, which closely matches the English concept of equity.

Another term used is Actif net, which corresponds more closely to net worth—representing total assets minus total liabilities.

　

CASE 2: What Counts as Current or Quick Assets?
Let’s turn to assets.

A company’s assets come in many forms: cash, inventory, real estate, equipment, etc.
Among them, assets that are expected to be converted into cash within one year are classified as current assets.

Examples of current assets include:

• Cash
• Accounts receivable
• Inventory stored in warehouses

But there’s an additional category to consider.

Inventory may take longer to convert into cash. In contrast, cash and accounts receivable are highly liquid.

This is why another term exists: quick assets, which refers to assets readily convertible into cash, excluding inventory.

In Summary:

• Current Assets = All short-term assets (cash, receivables, inventory, etc.)
• Quick Assets = Short-term assets excluding inventory (mainly cash and receivables)

In French?

• Actif circulant = Current assets
• Liquidités immédiates = Quick assets
• Inventaires = Inventory

A Note of Caution:
Avoid translating inventory too literally as “stored goods.”
For example, biens entreposés means “stored items,” but in accounting, the correct term is inventaires. Using the wrong term could lead to serious misinterpretation.

　

CASE 3: What about Non-Current Assets?
Are machines, patents, and buildings all the same?

Non-current assets are those that the company expects to hold for more than a year.
These include buildings, machinery, patents, trademarks, and investment properties.

But the way English and French categorize these assets differs slightly.

In English:

• PP&E (Property, Plant, and Equipment) – land, buildings, machinery
• Intangible Assets – patents, brand value, development costs
• Investment Property – real estate held for long-term investment

In French:

• Immobilisations corporelles – tangible assets (e.g., land, buildings, machinery)
• Immobilisations incorporelles – intangible assets (e.g., patents, trademarks)
• Immobilier d’investissement – investment property (real estate held for investment purposes)

Key Takeaway:
French uses the umbrella concept immobilisation (fixed assets) to classify asset types.
The terminology may differ, but the underlying structure aligns well with English.

　

CASE 4: When is a Liability Current, and When is it Non-Current?
Now let’s talk about what the company owes—its liabilities.

Like assets, liabilities are split based on time.

• Current Liabilities = Obligations due within a year (e.g., accounts payable, short-term loans, accrued salaries)
• Non-Current Liabilities = Obligations due after more than a year (e.g., long-term debt, bonds, pension liabilities, lease obligations)

In French:

• Passif circulant = Current liabilities
• Passif non courant = Non-current liabilities (IFRS-compliant term)

You may also encounter Passif immobilisé, especially in older texts or national GAAP contexts.

Important Nuance:
French accounting often uses more legally specific terms.
For instance, obligations convertibles means convertible bonds, and bons de souscription refers to subscription rights or warrants—both have legal implications beyond basic translation.

　

Summary: Key Terms at a Glance

Concept	English	French	Notes
Owner’s Equity	Equity	Capitaux propres	Shareholders’ stake in the company (capital + retained earnings)
Share Capital	Capital / Share Capital	Capital-actions	Total par value of issued shares
Capital Surplus	Capital Surplus	Primes (e.g., primes d’émission)	Amount paid above par value
Current Assets	Current Assets	Actif circulant	Assets liquid within one year
Quick Assets	Quick Assets	Liquidités immédiates	Excludes inventory
Inventory	Inventories	Inventaires	Stored goods held for sale
Tangible Assets	PP&E	Immobilisations corporelles	Buildings, equipment, etc.
Intangible Assets	Intangible Assets	Immobilisations incorporelles	Patents, trademarks, goodwill
Investment Property	Investment Property	Immobilier d’investissement	Long-term real estate holdings
Current Liabilities	Current Liabilities	Passif circulant	Payable within one year
Non-Current Liabilities	Non-Current Liabilities	Passif non courant	Includes long-term debt, leases

　

This overview isn’t just for accountants.
If you’re a translator, interpreter, analyst, or anyone working with international documents, these distinctions matter.

　

　

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