85M) Unrealized Gain/Loss Marketable Securities. A. Shortcut computation for Cumulative Translation Adjustment. 3. d) Cumulative translation adjustment as a deferred asset. Cumulative Translation Adjustment. Do not round your answers for part b. Unrealized Gain/Loss Marketable Securities. 5810 (8,715) Net asset position translated using rate in effect at date of transactions---34,689 Exposed net asset position - 12/31 60,000. With foreign exchange. The foreign currency translation reserve contains the cumulative translation adjustments on the translation of an entity’s net investment in a foreign operation in the consolidated financial statements. For foreign exchange forward contracts designated as net investment hedges, the forward carry component is excluded from the assessment of hedge effectiveness and recognized in OCI on a. Barclays PLC ADR Annual balance sheet by MarketWatch. Instead, translating the foreign entity’s financial statements into the reporting currency generates an equivalent gain or loss within the cumulative translation adjustment (CTA) account, a component of other comprehensive income. ) for 2019 and. For each of the items listed below, state whether they increase or decrease the balance in cumulative translation adjustments (assuming a credit balance at the beginning of the year)when the foreign currency strengthened relative to the U. Cumulative Translation Adjustment-Elimination. A translation adjustment is created by the change in the relative value of a subsidiary's mon- etary assets and monetary liabilities caused by exchange rate fluctuations. Cumulative Translation Adjustment account: This account is necessary if you choose to translate your functional currency balances into another currency for reporting. -The cumulative translation adjustment reflects changes in the fair values of marketable securities on the balance sheet. Add your perspective Help others by sharing more (125. Created with Highstock 2. See moreCumulative translation adjustment (CTA) results from the process of translating financial statements from a foreign entity’s functional currency into the. 1,775 debit b. C. Equity Investment. Small differences in the decimals of FX rates could result in significant variances for large transactions, which create challenges in FX revaluation, cumulative translation adjustment (CTA) rollforward, and intercompany elimination and settlement. -The cumulative translation adjustment can only. In this method, inventory, fixed assets, accumulated depreciation, cost of. A cumulative translation adjustment (CTA) summarizes the gains and losses resulting from varying exchange rates over time. 2m in positive cumulative translation adjustment. . ASC 830-30-40-1 requires CTA to be reclassified from equity to net income “upon sale or upon complete or substantially complete liquidation of an investment in a foreign entity. and its subsidiaries (the “Registrant,” “IFF,” “the Company,” “we,” “us” and “our”) is a leading creator and manufacturer of food, beverage, health & biosciences, scent and pharma solutions and complementary adjacent products, including cosmetic active and natural health ingredients, which are used in a. Foreign subsidiaries of U. In addition, adjusted EBITDA was 72. Net. Who are the experts? Experts are tested by Chegg as specialists in their subject area. The FX Opening and FX Movements will be calculated for the historical accounts using the. Question: 1. Book the resulting exchange differences to Cumulative Translation Adjustment accounts; Build a manual adjustments interface for users to fine-tune the streamlined result; Traditional design and why it’s bad. 22T. us Financial statement presentation guide 6. Study with Quizlet and memorize flashcards containing terms like Question 1 What is meant by the "translation" of foreign currency financial statements? A. The unit of account in ASC 815 is generally the individual derivative. It is recognized under the shareholder’s. Businesses with international operations must translate their transactions like the acquisition of assets or the purchase of services into their functional currency. Foreign currency translation–This is the process of expressing a foreign entity’s functional currency financial statements in the reporting currency. Cumulative translation adjustment, before income taxes (1 ) 26 (22 ) 26 Income taxes related to items of other comprehensive income - - - - Other comprehensive income (loss), net of tax. Please refer to the Translation Technical Brief in Note 139717. 5. How must Parentco handle this translation adjustment when it records sale of Subko?Cumulative translation adjustment (CTA) is an accounting entry that reflects the impact of fluctuations in currency exchange rates on a company’s financial statements. a derivatives hedge is necessary to bring balance to the consolidated balance sheet after an exchange rate. This type of adjustment can be included as part of an Eliminations Company. Do not round your answers for part b. A) The cumulative translation adjustment is a plug figure to balance the trial ba nce B) C) D) Changes in the cumulative translation adjustment are reflected in net income for the period The cumulative translation adjustment reflects changes in the fair values of marketable securities on the balance sheet. The Cumulative Translation Adjustment YTD on Figure 6 of -2,100 is not on Figure 7. Exch. Remeasurement Translation D. The CFO is unsure whether the cumulative translation adjustment should be removed from equity, and if so, to what other account it should be transferred. This section lists solutions for common consolidation issues such as retained earnings not rolling over for a period, Cumulative Translation Adjustment (CTA) not being calculated, opening balance and foreign exchange calculation inaccuracies, and custom member formulas being defined under Total Balance Sheet. 06B) (1. Translate using the current exchange rate at the balance sheet date for assets and liabilities. . In other words, currency translation adjustment does not appear "above the line. 5. The Cumulative. D. dollars. 14B) (1. Although ASC 830-30-40-1 and ASC 830-30-45-13 only address the treatment of cumulative translation adjustments, we believe that other amounts in AOCI should be analogized to this guidance (e. Sales are made and all expenses are incurred uniformly throughout the year. The foreign currency translation adjustment or the cumulative translation adjustment (CTA) compiles all the fluctuations caused by varying exchange rate. If the foreign currency is the functional currency, gains and losses on hedging instruments will be taken to other comprehensive income. Confirm the balance of the Equity Investment account of $4,139,188 on the. Looking at the nine-month period to 30 September and revenue was up by 18. This problem has been solved! You'll get a detailed solution from a subject matter expert that helps you learn core concepts. It is an entry in the accumulated other comprehensive income section of a translated balance sheet. 50,775 credit d. If you have posted manual journal entries to the CTA account, a separate Cumulative Translation Adjustment account line displays the balance from manual journal entries. View all BCS assets, cash, debt, liabilities, shareholder equity and investments. See examples of CTA entries for different scenarios and currencies. Translation Remeasurement. , Translation exposure refers to Multiple. NetSuite also creates a reversing journal entry for all intercompany journal. Net loss in the income statement. (d) Cumulative translation adjustment is the result of the exchange gain arising on the translation of exploration and evaluation assets held at SMSA, whose functional currency is the Brazilian Real, as a result of the appreciation of the Brazilian Real relative to the Canadian dollar during the six month period ended June 30, 2021. b. Create flashcards for FREE and quiz yourself with an interactive flipper. Example FX 7-1 illustrates the application of this guidance. 10) $ (0. account is required under the FASB No. 2023 2022 2021 2020 2019 5-year trend; Net Income before Extraordinaries----- Current Rate Method: A method of foreign currency translation where most items in the financial statements are translated at the current exchange rate. - The subsidiary's common stock was issued in 2007 when the exchange rate was $0. and more. USD 920. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $115,375. GAAP 2019: UK reporting – FRS 102 (Volume B)A) The cumulative translation adjustment is a plug figure to balance the trial ba nce. 50,775 debit. Assuming the foreign currency is the functional currency, what is the translation adjustment for 2017? The December 31, 2016, U. Proof of Translation Adjustment CAD Rate US Dollar Net assets at beginning of year 909,250 0. Comprehensive income is a statement of all income and expenses recognized during a specified period. Cl A Annual balance sheet by MarketWatch. Compute the translation adjustment for the year 2020 a. Current Rate Method: A method of foreign currency translation where most items in the financial statements are translated at the current exchange rate. Let’s first start with the basics. Purpose. Question: Weighted average, 2019 January 1, 2020 Weighted average rate for 2020 December 31, 2020 C$ 0. If you have multiple companies or. b) Current Rate Method, with the Cumulative. ) Translated at historical exchange rates The. Exch. Exch. If a subsidiary's financial statements are translated using the Current Rate Method, the translation gain (loss) is related to changes in. NetSuite does not support running multiple intercompany elimination process at the same time. During the measurement period, the acquirer then retrospectively adjusts those provisional amounts as it obtains the. The cumulative translation adjustment account affects the amount of gain or loss reported upon the sale of a foreign subsidiary. Unrealized Gain/Loss Marketable Securities-Option not to recognize any cumulative translation adjustment for foreign subsidiaries. The difference between values of consolidated exchange rates types results in a balance in the line for Cumulative Translation Adjustment (CTA) on some financial statements. The foreign currency financial statements of a foreign. The exchange rates were 0,8234 GBP/EUR on 10 September 2010, and 0,78 GBP/EUR on 3 January 2015. Updated June 24, 2022 CTAs, or currency trade adjustments, are ways to identify how changes in exchange rates affect the value of your international purchases. 50. Let’s first start with the basics. 4. 775 debit d. Cumulative translation adjustments: Under ASC 830, Foreign currency matters, an entity records a cumulative translation adjustment (CTA) as part of its accumulated other comprehensive income when it translates the financial statements of a foreign subsidiary that has a functional currency that differs from the entity’s reporting. When that is checked AND you uncheck the cumulative checkbox on the alternate date range it makes the cumulative translation amount for the period only. Direct computation of translation adjustment:For more information about this account, see Cumulative Translation Adjustment (CTA) Overview. CTA-E has two purposes: Acts as the clearing account for intercompany elimination journal entries. Converting financial statements of a foreign currency into a domestic currency C. This results in different rates being used and can cause an imbalance. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $115,375. cumulative translation adjustment as a deferred asset. This rule executes after translations, but before the Foreign Exchange/Cumulative Translation Adjustment (CTA) calculations. 15B) (1. Cumulative translation adjustment at December 31, Year 2: $8,000 There is a $5,000 translation adjustment for the first year and a $3,000 adjustment for the second year. Fin. Assume the same scenario described. dollar–translated balance sheet reported retained earnings of $162,250 and a cumulative translation adjustment of $9,650 (credit balance). Compute the cumulative translation adjustment to be reported on December 31, 2020 a. In cumulative translation adjustment until the hedged net investment is sold or liquidated. 22 0. b. All gains or losses from translation are reported as a cumulative translation adjustment to. Account type classification for natural account segment values. Gain. A . If a subsidiary is operating in a highly inflationary economy, how are the financial statements to be restated?A cumulative translation adjustment (CTA) summarizes the gains and losses resulting from varying exchange rates over time. b) Current Rate Method, with the. ASC Topic 830, Foreign Currency Matters (ASC 830), prescribes the accounting for foreign currency within the statement of cash flows. *BOY net assets calc = BOY RE + APIC + C/S - all in foreign currency balances. Adjustments can occur over the course of multiple accounting periods, as for. In this article, we walk through a concrete example of how this works for an example business. ca. e. 775 debit d. This is because the consolidation ledger currency. Overall, the CTA is an important. The CTA account achieves balance when there is more than one currency. 25 The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $46,950 credit (positive) balance. (in Euros) Translation In Rate US Dollars Income Statement: Sales 1,350,000 $1. 50 . 38B) Unrealized Gain/Loss Marketable. Exch. Cumulative Translation Adjustment/Unrealized For. Find your RI that balances your Balance Sheet. 0300 3,000 13,500. InFusion America Primary Ledger is using the subledger level. When calculating the first year's translation adjustment, you use the current rate technique to. 9m. 95M) (1. 5654 25,443 Dividends (15,000). 1. 2 Analysis of changes in cumulative translation adjustment. Date recorded: 05 Mar 2010 The IFRIC held an initial discussion on whether the separate foreign currency equity reserve related to the translation of the net assets of an investor's net investment in a subsidiary (often referred to as the cumulative translation adjustment, or 'CTA') should be recycled and if so, when such recycling is appropriate. IFRIC 16 Hedge of a Net Investment in a Foreign Operation; IFRIC 22 Foreign Currency Transactions and Advance Consideration; SIC-30 Reporting Currency – Translation from Measurement Currency to Presentation Currency. 16. Investopedia uses cookies to provide you with a great user experience. $ Direct computation of translation adjustment: BOY net assets. B: The cumulative translation adjustment account affects the amount of gain or loss reported upon the sale of a foreign subsidiary. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $120,375. Cumulative Translation Adjustment/Unrealized For. For each of the items listed below, state whether they increase or decrease the balance in cumulative translation adjustments (assuming a credit balance at the beginning of the. The subsidiary's common stock was issued in 2007 when the exchange rate was $0. D. 0300 0. You can browse all our books on FRS 102 and foreign currency or request any of the following popular titles by contacting us on +44 (0)20 7920 8620, by web chat, or at library@icaew. 8. Gain (414M) (450M) (403M) (448M) (445M) Unrealized Gain/Loss Marketable. Cumulative Translation Adjustment/Unrealized For. a. B: The cumulative translation adjustment account affects the amount of gain or loss reported upon the sale of a foreign subsidiary. In addition to the disclosures examples provided in this installation, the GAAP Financial Statement Disclosures Manual alsoCumulative translation adjustment : 1,345 (1,027) Net loss and comprehensive loss for the period $ (8,859) $ (7,402) Loss per common share : Equity holders of the Company : Basic and diluted net loss per common share (note 13) $ (0. Direct computation of translation adjustment:Answer. 5. Gain. Exch. The empirical tests are conducted on a sample of 204 U. A cumulative translation adjustment in a translated balance sheet summarizes the gains and losses from varying exchange rates. 51,775 debit, c. B: The cumulative translation adjustment account affects the amount of gain or loss reported upon the sale of a foreign subsidiary. Click the card to flip 👆. Cumulative translation adjustment at December 31, Year 2: $8,000; There is a $5,000 translation adjustment for the first year and a $3,000 adjustment for the second year. parent companies that operate in highly inflationary economies are required by GAAP to use which method for translating the financial statements: a) Temporal Method, with the Cumulative Translation Adjustment to be reported as part of Comprehensive Income. Advanced Accounting Final. The C. Cumulative Translation Adjustment (1,118,807) (2,064,091) Total shareholders' equity 28,602,064 16,929,063 Total liabilities and shareholders' equity $ 30,164,587 $ 17,896,612 Nature of Operations (note 1) Subsequent events (note 14) Approved on behalf of the Board: "Bruce Rosenberg" "Daniel Noone" Director DirectorCumulative Translation Adjustment Cumulative Translation Adjustment represents translation gains (losses) on financial statements of foreign subsidiaries. Gain-----Unrealized Gain/Loss Marketable Securities. Free Cash Flow (FCF): Formula to Calculate and Interpret It. 19 -963,900 Gross profit 540,000 642,600 Operating expenses -351,000 $1. This ensures that financial reports are as accurate as possible, and reflect the true economic health of the company. (2 words) 1. Intercompany Clearing XXX (deferred Cost of Goods Sold (COGS)) For more information about features and system-generated accounts, see Feature-Specific, System-Generated Accounts. For multi-currency consolidations, you may want to add an additional ‘Currency Translation Adjustment’ or a ‘Cumulative Translation Adjustment’ account to your consolidated group to balance the Balance Sheet. Compute the translation adjustment for the year 2020 a. g. The financial statements of many companies now contain this balance sheet plug. Accounting questions and answers. All values USD Millions. One of the key features of Oracle FCCS is the built-in balance sheet movement translations with FX/Cumulative Translation Adjustments (CTA) Calculations. This account line is used in consolidated balance sheet and trial balance reports. Find out the treatment of CTA for noncontrolling interests and equity method investments, and the difference from FX gains and losses. The CTA account captures the difference between these two exchange rates in US$. Cumulative Translation Adjustment/Unrealized For. ceaa-acee. Gain. Solely because of the change in the exchange rate, the company’s intercompany accounts (prior to any currency translation adjustments) no longer balance, as shown in Exhibit 2. Parentco, Inc. Hedge accounting guidance requires a reporting entity to designate hedging relationships at a transaction. b. Direct computation of translation adjustment + $ Net income x (EOY - Average exchange rate) EOY cumulative translation adjustment Please answer all parts of the question. cumulative translation adjustment as a deferred liability. parent companies that operate in highly inflationary economies are required by GAAP to use which method for translating the financial statements: a) Temporal Method, with the Cumulative Translation Adjustment to be reported as part of Comprehensive Income. When investigating problems in these areas the solution is often in the relevant Technical Briefs which also. The CTA line item presents gains and. The correct answer is A. Direct computation of translation adjustment: $ Net income x (EOY - Average exchange rate) EOY cumulative translation adjustment General Journal Description Debit Credit To record the translation adjustment. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $273, 564. Because the foreign currency exchange rate fluctuated during the period, the resulting gain or loss posts to the cumulative translation adjustment - elimination (CTA-E) account. Solution. Exch. g. 5,125. Cumulative Translation Adjustment. Cumulative Translation Adjustment/Unrealized For. *BOY net assets x (EOY rate - BOY rate) Net income x (EOY rate - Avg rate) - Dividends x (EOY rate - rate @ div declaration) = CTA for that year. Parent reports a cumulative translation adjustment using the equity method. In this post, let's talk about how Netsuite addresses it using this special system account called Cumulative Translation Adjustment-Elimination (CTA-E) CTA-E is a general ledger equity account. 10. Changes in reporting currency amounts that result from the translation process are called translation adjustments and are included in the cumulative translation adjustment. 6M) Unrealized Gain/Loss Marketable. Refer to the information below related to configuring a CTA GL Account:Study with Quizlet and memorize flashcards containing terms like Under the monetary/nonmonetary method, revenue and expense items associated with nonmonetary accounts, such as cost of goods sold and depreciation, are translated at the historical rate associated with the balance sheet account. The CTA is required under the FASB No. The cumulative translation adjustment(CTA) for a foreign currency translation adjustmetn arises as the all of the monetary assets (cash, financial assets,. b. Gain. Effective date of IAS 21 (1983) 1993. B) C) D) Changes in the cumulative translation adjustment are reflected in net income for the period The cumulative translation adjustment reflects changes in the fair values of marketable securities on the balance sheet. Gain-----Unrealized Gain/Loss Marketable Securities. Year-to-date net loss reaches €4. From my experience, in the HFM world equity translation is most commonly handled through a set of so-called “override” accounts. the effect that an unanticipated change in exchange rates will have on the consolidated financial reports of an MNC. 0300 0. Undeposited Funds. Gain-----Unrealized Gain/Loss Marketable Securities. Direct computation of translation adjustment: AnswerBOY cumulative translation adjustmentBOY net assets x (EOY - BOY exchange rates)BOY net assets x BOY exchange rateNet income x (EOY - Average exchange rate)Net income x. This line appears with other equity account type lines within the report. Sociedad Quimica y Minera De Chile S. , unrealized gains or losses on investments classified as available for sale, unrealized employee benefit plan gains or losses, etc. Companies should calculate this frequently and create a cumulative adjustment. The cumulative translation adjustment is a plug figure to balance the trial balance. 31B) (4. S. Net income for the year. Gain. Pension and other postretirement benefits items amortized into net income . The FASB has issued ASU 2013-05 titled Foreign Currency Matters (Topic 830) - Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. Step 6: Release the cumulative translation adjustment into net income, as applicable ASC 830-30-40-1 requires CTA to be reclassified from equity to net income “upon sale or upon complete or substantially complete liquidation of an investment in a foreign entity. Example 1: The tax effect of cumulative translation adjustments would be allocated specifically to other comprehensive income, whereas the tax effect of a tax rate. Lack of. (Round answers to 0 decimal places, e. The investor records a corresponding proportionate increase or decrease in its equity method investment for an increase or decrease in OCI (ASC 323-10-35-18). The balance recorded in the cumulative translation adjustment account, which was created from the translation process in prior periods, is not reversed when a foreign entity changes its functional currency because it is operating in a highly inflationary economy. . 10,000 . below. Foreign currency translation–This is the process of expressing a foreign entity’s functional currency financial statements in the reporting currency. BOY cumulative translation adjustment $(102,848) Answer Answer [E] Answer Current-year translation gain (loss) 179,596: Answer [C] Answer Answer [D] Answer EOY cumulative translation adjustment: $76,748: Answer Answer Balance sheet: Assets. DH 5. 9. programme de suivi environnemental n'est prévu. Translate the subsidiary's income statement, statement of retained earnings, balance sheet, and statement of cash b. An entry in a translated balance sheet over a period of years. none of the options. Round answers to the nearest dollar. b. 1,775 debit b. This would be combined with any other comprehensive income items. C. Learn how to calculate, record and automate CTA entries with SoftLedger, a cloud. Current Rate Method & Financial Statement Effects. creat D. multinational firms for the time period 1991–1996. Get a hint. Cumulative 3-year inflation in excess of 100%. A cumulative translation adjustment (CTA) summarizes the gains and losses resulting from varying exchange rates over time. 5M) (4. One of the key features of Oracle FCCS is the built-in balance sheet movement translations with FX/Cumulative Translation Adjustments (CTA) Calculations. Prepare a schedule to verify the translation adjustment. Year 2's total translation adjustment is $8,000 as of the end of the year. The cumulative translation adjustment (CTA) is a currency translation adjustment on the balance sheet, reflecting gains and losses caused by exchange rate fluctuations over time. For example, let’s say that the German company was established on 10 September 2010 with the share capital of EUR 100 000. 3. The effect of changes in exchange rates between the foreign entity’s functional currency and the reporting currency is recognized in the reporting entity’s. View all AWK assets, cash, debt, liabilities, shareholder equity and investments. General Electric’s CTA was a negative $4. A Cumulative translation adjustment (CTA) summarizes the gains and losses resulting from varying exchange rates over time. This option is only available for multi-currency applications. Cumulative Translation Adjustment. Who are the experts? Experts have been vetted by Chegg as specialists in this subject. (2,945). The foreign currency translation adjustment or the cumulative translation adjustment (CTA) compiles all the fluctuations caused by varying exchange rate. International Flavors & Fragrances Inc. . 6% the past 2 days ; 6:28a SolarEdge stock price target cut to $140 from $176 at TD CowenFiscal year is January-December. Converting financial statements prepared under foreign GAAP into domestic GAAP B. This amount is reflected in Foreign exchange transaction losses on. Sts A. Study with Quizlet and memorize flashcards containing terms like Question 1 What is meant by the "translation" of foreign currency financial statements? A. The C. ). The excess of fair value over book value since the date of acquisition is revalued for the change in exchange rate. Gain (1. All values USD Millions. S. 3 billion in 2005 and a positive $3. BOY net assets x (EOY - BOY exchange rates) BOY net assets x BOY exchange rate. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e. 4. 1 Unit of account. CTA account. C. The FASB has issued ASU 2013-05 titled Foreign Currency Matters (Topic 830) - Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. Under the current rate method, the translation adjustments don’t affect the income statement but instead are included in other comprehensive income (OCI) and. 4 million related to a joint venture investment located in South Africa. Exch. The cumulative translation adjustment related to a specific foreign entity is transferred to net income when that entity is sold or otherwise disposed of. Where is the translation adjustment reported in the parent company's financial statements? a) Retained earnings. The CTA account captures the difference between these two exchange rates in US$. You can also click the amount for the Cumulative Translation Adjustment in the Balance Sheet, Comparative Balance Sheet, and Trial Balance to open this report. EUR 23,000. amounts that result from the translation process are called translation adjustments; translation adjustments are included in the cumulative translation adjustment. Compute the ending cumulative translation adjustment directly, assuming a BOY balance of $(37, 237). Assets and Liabilities. A positive cumulative translation adjustment of €685 is needed as a balancing amount, which is reported in the stockholders’ equity section. Expert Answer. The entry on Line 23a should allow the IRS to differentiate between the actual day-to-day operational gains and losses and those caused due to foreign currency translation. All values USD Millions. Study with Quizlet and memorize flashcards containing terms like Where is the translation adjustment reported in the parent company's financial statements? A. Process eliminations in a consolidated or elimination company – You can process and post eliminations as a single process during consolidation. the cumulative amount of exchange differences that have arisen from the translation of a foreign operation before the foreign operation becomes hyperinflationary. Line 23b. DH 8. View all RL assets, cash, debt, liabilities, shareholder equity and investments. 6M. 6 for hedges of foreign currency risk . This balancing amount is. Exch. had a negative cumulative translation adjustment of ($250,000) on its balance sheet pertaining to its investment in Subko, Ltd at the point in time that Parentco sold its interest in Subko. Cumulative Translation Adjustment/Unrealized For. The applications can be configured to include the CTA account in the balance sheet, or in comprehensive income. 1 Cumulative translation adjustment in impairment tests. Note: The Cumulative Translation Adjustment (CTA) account is required for ledgers running translation. Both will give you different results on foreign exchange, as reporting currency ledgers will pull the rate from the transaction in real time, and month.