How are the financial statements of Engel & Volkers Canada translated into U.S. dollars?

According to Engel & Volkers' 2025 Franchise Disclosure Document, the financial statements of Engel & Volkers Canada are prepared in Canadian currency and then translated into U.S. dollars for consolidation purposes. The balance sheet items are translated using the current exchange rates at the end of the reporting period, or historical exchange rates where appropriate. The income statement (results of operations) and cash flow items are translated using average exchange rates during the year. Any gains or losses that arise from this translation process are recognized in accumulated other comprehensive income (loss). Realized exchange gains or losses from foreign currency transactions are reported as other income or expense in the consolidated statements of comprehensive income (loss).

For a prospective Engel & Volkers franchisee, this means that the financial performance of the Canadian operations, which are part of the consolidated financial statements, are reflected in U.S. dollars. The translation methodology ensures that the financial data is comparable across the entire Engel & Volkers Americas, Inc. and Subsidiary. Franchisees should be aware that fluctuations in exchange rates between the Canadian dollar and the U.S. dollar can impact the reported financial results.

It is important to note that the financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). This provides a standardized framework for financial reporting, making it easier to understand and compare the financial performance of Engel & Volkers with other companies that also follow U.S. GAAP. The use of U.S. dollars as the reporting currency and adherence to U.S. GAAP are standard practices for U.S.-based franchisors with international subsidiaries, as it simplifies the consolidation and reporting process for investors and stakeholders.