Cumulative Translation Adjustments in Oracle Financial Consolidation & Close (FCCS)

When it comes to the financial close, stakeholders and regulatory bodies require speed and accuracy. By implementing Oracle Financial Consolidation & Close Cloud Service (FCCS), your organization can focus on core business needs, and eliminate the cost and dependencies of infrastructure overhead.  Oracle Services FCCS allows companies to deliver financial and non-financial data to all stakeholders with precision and reliability.

 

One of the key features of Oracle FCCS is the built-in balance sheet movement translations with FX/Cumulative Translation Adjustments (CTA) Calculations. This option is only available for multi-currency applications. The applications can be configured to include the CTA account in the balance sheet, or in comprehensive income. This blog outlines the process of performing CTA translation adjustments in Oracle FCCS.

 

CTA  Account

  • System allows to capture FX information in a separate CTA account for all of the historical accounts.
  • CTA member represents the total CTA adjustments.
  • Calculation logic is included in the consolidation script for the re-direction from the source historical accounts to the CTA account.
  • With one CTA account, all FX-CTA calculation results are accumulated to the single CTA account.
  • CTA account is part of Owner’s Equity on the Balance Sheet for US-GAAP reporting purposes.

 

CICTA Account

  • CTA adjustments in a single Comprehensive Income CTA account (CICTA) can be captured as part of the Statement for Comprehensive Income for IFRS reporting purposes which aggregates to the balance sheet Other Reserves account.
  • Calculation logic is included in the consolidation script for the re-direction from the source historical accounts to the CTA account.
  • FCCS_CICTA account includes an optional CICTA Redirection Account setting.
  • FX calculation from historical accounts is written to the FCCS_CICTA account.

 

Exchange Rates

FCCS supports two system exchange rates

  • Ending Rate for Balance Accounts
  • Average Rate for Flow Accounts

 

Historical Accounts

 

  • The Historical Accounts group contains Historical accounts with a Rate Override or an Amount Override for translation.
  • Historical accounts are created as shared members, for example, FCCS Common Stock
  • If an account is a Historical Account, but does not contain an Override (for example, Retained Earnings), it is not included in the Historical Accounts hierarchy.
  • Historical Account must assign “Historical Rate Override” or “Historical Amount Override” as the Exchange Rate Type.
  • System uses the applicable override for the account during translation.
  • If not specified the Historical account is translated using the Average rate.
  • A pre-built system form named Override Rates is generated from the Historical Account Hierarchy enables to either the Override amount or Override rate for each entity for each currency

 

Cash Change Hierarchy

  • Shows the opening and closing balance of cash accounts and calculates the change in cash adjusted for currency fluctuations.
  • No Configuration is required

 

Original Content Source: https://www.jadeglobal.com/blog/cumulative-translation-adjustments-cta-in-fccs/

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