Accumulated other comprehensive income is a separate line within the stockholders' equity section of the balance sheet. This line accumulates the effects of items known as other comprehensive income, which are reported in each period's statement of comprehensive income. It is analagous to retained earnings which is accumulating the revenues and expenses that are reported on each period's income statement.
Some examples of the items which comprise accumulated other comprehensive income include:
- Unrealized gains/losses on hedge/derivative financial instruments
- Foreign currency translation adjustments
- Unrealized gains/losses on postretirement benefit plans
In short, the above examples will impact the balance sheet and the statement of comprehensive income. However, the examples will not affect net income, the income statement, or retained earnings.
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