Cumulative Translation Adjustment - CTA

A A A

DEFINITION

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.



INVESTOPEDIA EXPLAINS

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.




RELATED TERMS
  1. Internationalization

    The designing of a product in such a way that it will meet the needs of users ...
  2. Translation Risk

    The exchange rate risk associated with companies that deal in foreign currencies ...
  3. Comprehensive Income

    The change in a company's net assets from nonowner sources over a specified ...
  4. Financial Accounting Standards ...

    A seven-member independent board consisting of accounting professionals who ...
  5. Translation Exposure

    The risk that a company's equities, assets, liabilities or income will change ...
  6. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding share of common ...
  7. Return On Investment - ROI

    A performance measure used to evaluate the efficiency of an investment or to ...
  8. Working Capital

    This ratio indicates whether a company has enough short term assets to cover ...
  9. Billing Cycle

    The interval of time during which bills are prepared for goods and services ...
  10. Amortization

    1. The paying off of debt in regular installments over a period of time. 2. ...
Related Articles
  1. Corporate Currency Risks Explained
    Forex Education

    Corporate Currency Risks Explained

  2. CEO Savvy And Stock's Success Go Hand ...
    Personal Finance

    CEO Savvy And Stock's Success Go Hand ...

  3. Free On Board
    Professionals

    Free On Board

  4. Investing In Natural Gas? Eye ETFs, ...
    Investing News

    Investing In Natural Gas? Eye ETFs, ...

  5. Fracking ETFs Or Drilling Services Stocks?
    Investing News

    Fracking ETFs Or Drilling Services Stocks?

  6. How To Use The Top Yahoo! Finance Tools
    Fundamental Analysis

    How To Use The Top Yahoo! Finance Tools

  7. Getting On The Right Side Of The P/E ...
    Fundamental Analysis

    Getting On The Right Side Of The P/E ...

  8. What The Dow Means And Why We Calculate ...
    Fundamental Analysis

    What The Dow Means And Why We Calculate ...

  9. Top 8 Ways Companies Cook The Books
    Personal Finance

    Top 8 Ways Companies Cook The Books

  10. An Introduction To The CMA Designation
    Professionals

    An Introduction To The CMA Designation

comments powered by Disqus
Hot Definitions
  1. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  2. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  3. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  4. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  5. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  6. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
Trading Center