Harness Money

What is accumulated other comprehensive income (OCI)?

Accumulated other comprehensive income (OCI) is a component of shareholders’ equity that represents the cumulative amount of gains or losses that are not included in net income but have been recognized in the financial statements. It consists of various items that are not part of the regular income statement but affect the overall financial position of a company.

OCI includes items such as unrealized gains or losses on available-for-sale securities, foreign currency translation adjustments, changes in the value of certain derivative instruments, and adjustments related to pension plans or other post-employment benefits. These items are recorded directly in the comprehensive income section of the statement of comprehensive income.

Accumulated OCI represents the net cumulative amount of these gains and losses over time. It is shown as a separate line item in the equity section of the balance sheet and is included in the total shareholders’ equity. It provides insights into the overall financial performance of a company, considering both realized and unrealized gains and losses that have yet to impact net income.