If your group has subsidiaries operating in foreign currencies, you already know the pain. Three different exchange rates. Multiple equity accounts. Retained earnings accumulated over years. And a CTA balance in OCI that has to be mathematically perfect before you can close the consolidation.
Most firms still do this in Excel. BrizoSystem eliminates it entirely.
What Is CTA and Why Does It Exist?
Under IFRS (IAS 21) and US GAAP (ASC 830), foreign subsidiaries must be translated into the group’s presentation currency using different rates for different account types:
- Closing rate — balance sheet assets and liabilities
- Average rate — income statement items
- Historical rate — equity accounts (share capital, reserves, retained earnings)
Because these rates differ, a translation gap always emerges. That gap is the CTA — posted to Other Comprehensive Income, not the P&L. It doesn’t affect operating profit or cash, but it directly moves group equity and must be fully reconciled every year-end.
Getting it wrong means restatements, audit queries, and late nights.
How BrizoSystem Handles CTA
BrizoSystem’s CTA module sits inside Adjustments → Automated in the consolidation workflow. Here’s what it actually does.
Configure per subsidiary — with full rate control
(Image 1 — Equity Historical Rates tab)
For each foreign subsidiary, BrizoSystem lets you define:
- Functional CCY and Presentation CCY (e.g. SGD → USD for Demo Sales Company)
- CTA enabled toggle per entity — so only qualifying foreign operations are included
- Equity historical rates per account — Share Capital, Share Premium, Revaluation Reserve, Hedging Reserve, FVOCI Reserve, each mapped to its own historical rate
Rates are sourced automatically by the system, but can be overridden manually per account where needed. The Source column shows whether the rate is system-derived or manually set, giving you a clean audit trail on every line.
Retained earnings translated year by year
(Image 2 — Retained Earnings by Year tab)
Retained earnings require their own treatment — each year’s opening balance is translated at the average rate for that year, not the closing rate. BrizoSystem handles this automatically across the full history of the entity.
In the screenshot, you can see four years of retained earnings for Demo Sales Company — 2024 through 2027 — each translated at the correct yearly average rate (1.3265, 1.3445, 1.3310, 1.3310), with the translated USD amount calculated and displayed instantly. Rates default from yearly averages but can be adjusted, with the Source column confirming system vs manual.
This removes what is typically one of the most manual, error-prone steps in any multi-currency consolidation.
One click to post
Once configuration is complete, Reconcile / Verify CTA lets you review both auto and manual CTA journals before committing. When everything checks out, Post CTA Journal posts the balance directly into the consolidated financial statements — no manual journal entry required.
CTA posts at fiscal year-end and flows only into consolidated statements, not into the subsidiary’s standalone books. Exactly as it should be.
What This Replaces
| Manual Process | BrizoSystem |
|---|---|
| Spreadsheet with hardcoded exchange rates | Centrally managed rates, applied automatically |
| Manual journal to post CTA to OCI | One-click Post CTA Journal |
| Separate RE translation workpaper by year | Built-in Retained Earnings by Year tab |
| No audit trail on rate sources | System vs Manual source tracked per line |
| Risk of rate version mismatch across entities | Single source of truth across all subsidiaries |
Built for Accounting Firms Managing Multi-Entity Clients
If you run consolidated reporting for groups with offshore subsidiaries — whether in SGD, USD, GBP, AUD or any other currency mix — BrizoSystem’s CTA module is built for exactly that workflow. It’s part of a complete consolidation engine that also handles auto eliminations, NCI, journal entries, and Elimination Validation — all in one platform.
Ready to Run Your First Multi-Currency Consolidation?
See how BrizoSystem handles CTA, eliminations, and consolidated reporting end to end — without a spreadsheet in sight.