Concept: CTA System Accounts
Definition and Purpose
Balance sheet accounts, such as Asset and Liabilities, generally use end-of-month exchange rates (EOM). However, some accounts in the Equity section of the balance sheet use assigned exchange rates. Since the exchange rates fluctuate over time, the balance sheet falls out of balance.
The Cumulative Translation Adjustment (CTA) is an accounting tool. It makes adjustments to the balance sheet to account for the exchange rate calculation. It moves the differences to a special account, called the CTA account.
For Adaptive Planning and Close instances or if you have enabled translated currencies for the actuals version, we don’t recommend that you use the system account for CTA. Instead, load the CTA value from your source into a custom account.
The CTA Account
You can enable CTA in the
Currency
area of Modeling
. When you enable CTA, we create a system account in the General Ledger hierarchy. The account is a child account of the Equity
root account. It has a predefined formula that calculates the difference between the exchange rate types. You can’t edit the formula, or the account settings. The formula we use is:
(Assets converted using their assigned exchange rate type) - (Assets converted using EOM) - (Liabilities & Equity converted using their assigned exchange rate type) - (Liabilities & Equity converted using EOM).
The CTA account assures that your balance sheet is in balance after currency translations have occurred.
CTA Account on Sheets
Administrators assign a currency to each level. On sheets, the currency for the level that you have selected is the currency for the data that you enter or view. As you switch between levels, the currency also switches and translates.
When the CTA account is on your sheet, the sheet cells for the CTA account reflect the adjustments made when you translate between the level currencies. When you use Explore Cell on a CTA cell, the value displayed matches the value on the sheet cell.
CTA Account on Reports
In reports, CTA accounts display:
- No values (zeros) for translated currencies because data is already loaded using the target currency. Hence, no exchange rates are applied.
- Values or conversion deltas for non-translated currencies. The conversion deltas display values as per the applicable exchange rates.
- Values that might not match the values that display in Explore Cell. The discrepancy occurs because the Explore Cell uses the level currency, which doesn't always match the currency defined in the report definition. Example: The Sales level has a CAD currency. You add the Sales level to a report with the MXN currency. The value for CTA is 20 in the MXN currency. The value 20 represents the translation delta when converting from CAD (level currency) to MXN (reporting currency for that column). When you drill down on this value using Explore Cell, you see "Empty CAD" because there's no currency delta.