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What is other comprehensive income?

Author:
Harold Averkamp, CPA, MBA

Definition of Other Comprehensive Income

Other comprehensive income, or OCI, consists of items that have an effect on the balance sheet amounts, but the effect is not reported on the company’s income statement. Instead, these changes are reported on the statement of comprehensive income along with the amount of net income from the income statement.

Since the OCI items do not affect the net income, they do not cause a change in a corporation’s retained earnings. Instead, the current period’s OCI items cause a change in accumulated other comprehensive income, which is a different component of stockholders’ equity.

Examples of Other Comprehensive Income

Some examples of the items classified as other comprehensive income include:

  • Unrealized gains/losses on hedge/derivative financial instruments
  • Foreign currency translation adjustments
  • Unrealized gains/losses on postretirement benefit plans
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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

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