Cumulative Translation Adjustment - CTA


DEFINITION of 'Cumulative Translation Adjustment - CTA'

An entry in the comprehensive income section of a translated balance sheet summarizing the gains/losses resulting from varying exchange rates over the years. A CTA entry is required under the Financial Accounting Standards Board (FASB) No.52 rule as a means of helping investors differentiate between actual operating gains/losses and those generated via translation.

BREAKING DOWN 'Cumulative Translation Adjustment - CTA'

By knowing what a company has earned or lost through its day-to-day business operations, rather than from an accounting practice, investors are better able to make sound financial decisions. Cumulative Translation Adjustments are an integral part of the financial statements for firms with international market exposure.

  1. Internationalization

    The designing of a product in such a way that it will meet the ...
  2. Financial Accounting Standards ...

    A seven-member independent board consisting of accounting professionals ...
  3. Comprehensive Income

    The change in a company's net assets from nonowner sources over ...
  4. Translation Risk

    The exchange rate risk associated with companies that deal in ...
  5. Translation Exposure

    The risk that a company's equities, assets, liabilities or income ...
  6. Encumbrance

    A claim against a property by a party that is not the owner. ...
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