[Eric Sung]

Hey everyone, I just started my FAR prep and I’m taking Roger’s with supplements from NINJA. The way Roger’s textbook is written makes it somewhat confusing to understand certain concepts like Marketable Securities.

In my case, is Comprehensive Income listed only on the Balance Sheet as a result of Net Income + OCI? And is OCI only seen on the income statement? Then there’s accumulated comprehensive income and accumulated OCI which I also see on the balance sheet. Can anyone clarify exactly where these things are seen on the financial statements?

[CPA so close, so far away]

Other Comprehensive Income (OCI) only refers to the adjustments to Net Income for a specific period. So these include Pension adjustments, Unrealized Gains/Losses on AFS securities, Effective portion of cash flow hedges, Foreign currency translation adjustments, and Revaluation adjustments for IFRS.

Comprehensive Income is Net Income for the period adjusted for the OCI items above.

Accumulated Comprehensive Income is very much like accumulated retained earnings. It just adds from the prior period. Remember, items come into Comprehensive Income and then they are reclassified when its time they hit the Income Statement. The reason we see Accumulated Comprehensive Income on the Balance Sheet is due to the fact that OCI are changes in equity that are not reflected in the Income Statement.

Hope that helps!

[marimia22]

erick one trick that i used to pass far (81) was when they asked something about comprehensive income, I include the net income in the answer calculation. When they ask for Other comprehensive income i do not include the net income in the answer calculation.

FAR 05/24/16 73 07/27/2016
reg 07.07.2016

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