Accumulated Other Comprehensive Income


The term accumulated other comprehensive income refers to a balance sheet line item used to summarize other comprehensive income in the current and prior periods.  Also known as AOCI, this balance sheet line item is used to summarize the unrealized gains and losses appearing as other comprehensive income that remain unsettled.

Accumulated other comprehensive income appears in the stockholders' equity section of the balance sheet.


Also known as comprehensive earnings, the Statement of Financial Accounting Standards No. 130 defines comprehensive income as the change in equity of a company resulting from transactions and other events from non-owner sources in a given period of time.  This would include unrealized gains and losses on securities that are available for sale, foreign currency adjustments, as well as changes to certain pension benefit obligations.

The consolidated statement of comprehensive income provides investor-analysts with insights into the unsettled transactions that could result in a gain or loss, and how these transactions would affect net income in the current period.  The general ledger account accumulated other comprehensive income, or AOCI, is a balance sheet line item that summarizes the gains and losses that have occurred in the current period, and in the past, and that remain unrealized.

When a gain or loss is eventually realized, a debit or credit is made to the balance sheet line item accumulated other comprehensive income, and a corresponding credit or debit is made to a line item on the income statement.  Since the now-realized gain or loss has served to increase or lower net income, the transaction has effectively moved the dollars from accumulated other comprehensive income to retained earnings.


The following illustrates how accumulated other comprehensive income would appear in the stockholders' equity section of the balance sheet:

Stockholders' Equity Current Year Prior Year
Common Stock: 1,000,000 shares, par value $0.01 $10,000 $10,000
Additional Paid-in Capital in Excess of Par $25,000,000 $25,000,000
Treasury Stock: 100,000 shares at $24.00 per share ($2,400,000) ($2,400,000)
Retained Earnings $48,525,000 $44,643,000
Accumulated Other Comprehensive Gain or (Loss) ($672,000) ($705,600)
Total Stockholders' Equity $70,463,000 $66,547,400

Related Terms

stockholders' equity, retained earnings, comprehensive incomeother postemployment benefits