What is accumulated other comprehensive income?

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.

Free Financial Statements Cheat Sheet

You are already subscribed. This offer is not available to existing subscribers.
Error: You have unsubscribed from this list.
Step 2: Please check your email.