The CTA account captures the difference between these two exchange rates in US$.Hence, the CTA amount is the balancing amount so you can consolidate and report the Mexican in US$. The CTA balance accumulated over the years is recorded in the Accumulated Other Comprehensive Income (AOCI), which is a component of equity. If not please feel free to contact me and I can walk you with a working example that is more specific to your situation as I have worked with a lot of complex foreign exchange related issues.What really has me curious is that as you state "the CTA amount is the balancing amount so you can consolidate and report the Mexican operations in US$" but as I think through the statement translation process the CTA by definition seems to be a one-sided balancing amount and therefore by deduction I think only an amount used for reporting purposes "a balancing amount to make the consolidation process work" and therefore it doesn't get recorded in any GL accounts. Hi Stephen - This is the same email I had sent you last night - posting it here as it might be helpful for the others in the group.The CTA is recorded in consolidated financial statements. The double entry is will be as follows: Assume you invested an amount of US0 million in the foreign (Mexican) operation - a separate legal entity.Companies that consolidate the results of foreign operations denominated in local currencies must translate the foreign financial statements into U. ASC 830 also applies to the translation of financial statements for purposes of consolidation or combination, or the equity method of accounting. ASC 830 (aka FAS 52) provides the accounting and reporting requirements for foreign currency transactions and the translation of financial statements from a foreign currency to the reporting currency.I recently started working for a company that has a Mexican Mequilladora operation and they have not been correctly implementing FAS 52 as it applies to financial statement translation, so when I translated the Mexican operation's financial statements from Pesos to Dollars and went to record the translation loss to equity, I realized I had a one-sided adjustment that was needed in order to bring the Mexican dollar statements back into balance, which I guess means that the foreign currency translation adjustment must only be cumulative translation adjustments for reporting purposes and that it doesn't get recorded in the accounts; or am I doing something wrong?
Actual rates are the rates at the date of the individual transactions, but you can use the average rate for the year if the actual rates do not differ too much.
In today’s world, most groups spread their activities abroad and logically different members of the group operate in different currencies.
Is the consolidation process of combining the financial statements of two (or more) companies different when they operate in different currencies? If you want to combine the financial statements prepared in different currencies, you will still follow the same consolidation procedures.
Every company has just Have you already checked out the IFRS Kit?
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