What adjustment handles variances from different exchange rates?

The Cumulative Translation Adjustment is designed to account for variances that arise from the use of different exchange rates when consolidating financial statements from multiple currencies. This adjustment is crucial in a global financial environment where companies operate across various countries and currencies. When financial statements are prepared, the value of assets, liabilities, revenues, and expenses may fluctuate due to changes in exchange rates over time.

The Cumulative Translation Adjustment captures these fluctuations to ensure that the consolidated financial statements accurately reflect the overall value of an organization's resources and obligations in a single reporting currency. This adjustment is typically reflected in the equity section of the balance sheet, allowing for a clear representation of the consolidated results without distorting the income statement with frequent changes in exchange rates.

In contrast, other options do not specifically address the cumulative effect of exchange rate variances. New Currency Addition refers to the process of integrating a new currency into the system for future transactions, while Version-Specific Exchange Rates pertain to establishing rates for specific versions of financial plans, and Multiplier Adjustment involves scaling figures but does not inherently manage exchange rate fluctuations. Therefore, the Cumulative Translation Adjustment is the correct choice as it directly relates to handling variances caused by different exchange rates.