accumulated other comprehensive income meaning
Accumulated other comprehensive income is a general ledger account that is classified within the equity section of the balance sheet. It is used to accumulate unrealized gains and unrealized losses on those line items in the income statement that are classified within the other comprehensive income category. Accumulated other comprehensive income (AOCI) accumulates other comprehensive income (OCI), which records unrealized and realized gains and losses from certain transactions. Unrealized means paper gains and losses, which are usually not part of the net income calculation for a small business. Companies use accumulated other comprehensive income to take into account the fair value of investments that have not yet been bought or sold. For example, securities held by a company that have increased in value but have not yet been sold haven’t given the company profit. accumulated other comprehensive income. A separate line within stockholders' equity that reports the corporation's cumulative income that has not been reported as part of net income on the corporation's income statement. DEFINITION of 'Accumulated Other Comprehensive Income'. An entry that is generally found in the shareholders' equity section of the balance sheet. Companies use accumulated other comprehensive income to take into account the fair value of investments that have not yet been bought or sold. Investors reviewing a company’s balance sheet can use the accumulated other comprehensive income account as a barometer for upcoming threats or windfalls to net income. For example, a large unrealized loss from bond holdings today could spell trouble if the bonds are nearing maturity. If the other comprehensive income is a negative amount, meaning that it is actually a loss, then the ending balance in accumulated other comprehensive income is the beginning balance minus the other comprehensive income. Other comprehensive income is the net effect of accounting transactions that bypass the income statement and are recognized directly in equity, for example, gains and losses on available for sale securities, unrecognized actuarial gains and losses, changes in revaluation surplus, etc. Other comprehensive income. Other comprehensive income is the net effect of accounting transactions that bypass the income statement and are recognized directly in equity, for example, gains and losses on available for sale securities, unrecognized actuarial gains and losses, changes in revaluation surplus, etc.
A general ledger account that is classified within the equity section of the balance sheet.