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It referes to the percentage of net earning not paid out ad dividends, but retained
by the company to be reinvensted in its core business or to pay debit. it is
recorded under shareholders equit on the balance sheet.
So what happens to the accumulated CTA balance? The CTA balance accumulated over
the years is recorded in the Accumulated Other Comprehensive Income (AOCI), which
is a component of equity.
Stephen.....let me know if the above helps. 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.
Please note that you might need to also need to consider some other accounting
issues, such as is the net investment in the Mexican operations hedged? If yes, was
it hedged using a derivative or non-derivative. Also CTA is only released through
the income statement under very specific situations.