CTA in the Ownership process
When a consolidation posts journals, it calculates the contribution to CTA, if any, from the source units and lines of each Ownership journal adjustment that posted to an ownership unit. After initializing a new fiscal year with the Start New Year process, subsequent consolidations additionally calculate the exchange differences attributable to previous year-end and current period rates.
Rules
- The CTA is calculated for lines defined as translation gain/loss in Architect.
- Periodic CTA is not produced when the source currency is the same as the target currency.
- For a periodic view, the Opening Balance component of the CTA is reflected only in the first period of the fiscal year. For a year-to-date view, the component is calculated for each period. This is shown in these examples.
Examples
The CTA for the targeted currency (USD) is calculated using these source data (periodic, local data):
| Account | Nov 2009 | Dec 2009 | Jan 2010 | Feb 2010 |
|---|---|---|---|---|
| Opening Reserves (uses historical rate) | 80,000 | 84,000 | 94,000 | 100,000 |
| Profit for Period (uses average rate) | 4,000 | 10,000 | 6,000 | 10,000 |
| Closing Reserves (uses period end rate) | 84,000 | 94,000 | 100,000 | 110,000 |
| Rate | Nov 2009 | Dec 2009 | Jan 2010 | Feb 2010 |
| Average | .0080 | .0081 | .0082 | .0083 |
| Period End | .0100 | .0110 | .0120 | .0130 |
| Account | Nov 2009 | Dec 2009 | Jan 2010 | Feb 2010 |
|---|---|---|---|---|
| Opening Reserves | 800 | 840 | 1,034 | 1,200 |
| Profit for Period | 32 | 81 | 49 | 83 |
| CTA: Opening Balance Component | 0 | 0 | 94 | 0 |
| CTA: Current Period Activity | 8 | 113 | 23 | 147 |
| Closing Reserves (uses period end rate) | 840 | 1,034 | 1,200 | 1,430 |
| Account | Nov 2009 | Dec 2009 | Jan 2010 | Feb 2010 |
|---|---|---|---|---|
| Opening Reserves | 0 | 0 | 1,034 | 1,034 |
| Profit for Period | 790 | 871 | 49 | 132 |
| CTA: Opening Balance Component | 0 | 0 | 94 | 188 |
| CTA: Current Period Activity | 50 | 163 | 23 | 76 |
| Closing Reserves (uses period end rate) | 840 | 1,034 | 1,200 | 1,430 |
Target Data (YTD, USD)
The CTA is calculated using these formulas:
- CTA Opening Balance Component = (year-end ending balance amount * current period rate) - (year-end ending balance amount * prior year-end rate)
- January 2010 Example: (94,000 * .012) - (94,000 * .011) = 94 (for both periodic and YTD views)
- February 2010 Example: (94,000 * .013) - (94,000 * .011) = 188 (for the YTD view only)
CTA for Current Period Activity = difference between the translated ending balance amount and all remaining amounts in the opening balance suite or, more specifically:
For periodic data and the first period of YTD data = (current period ending balance amount * current period rate) - (current period movement line amount * current period rate) - (current opening balance amount * prior period rate) - (CTA opening balance component)
January 2010 Example: (100,000 * .012) - (6,000 * .0082) - (94,000 * .011) - 94 = 23 (periodic and YTD views)
For remaining periods of YTD data = (current period ending balance amount * current period rate) - (current period movement line amount * current period rate + prior period's translated movement line total) - (year-end ending balance amount * prior period rate) - (CTA opening balance component)
February 2010 Example: (110,000 * .013) - (10,000 * .0083 + 49) - (94,000 * .011) - 188 = 76 (YTD view only)