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Chapter 5 — Foreign Currency Translations

5.4 Release of CTA

5.4 Release of CTA

ASC 830-30 includes guidance on the circumstances under which a CTA may be released, such as scenarios involving (1) full and substantially complete liquidations and (2) partial sales and liquidations. To apply the guidance in ASC 830-30, an entity needs to identify whether the sale or liquidation is related to an investment in a foreign entity or an investment within a foreign entity as well as whether the investment is consolidated or accounted for under the equity method. An investment in a foreign entity is typically reflected via a direct ownership interest in the foreign entity. By contrast, an investment within a foreign entity reflects the net assets or ownership of the foreign entity and is indirect.