Accumulated Other Comprehensive Income (AOCI)

Category

Balance Sheet

Units

Currency

US-GAAP elements

AccumulatedOtherComprehensiveIncomeLossNetOfTaxAccumulatedOtherComprehensiveIncomeLossForeignCurrencyTranslationAdjustmentNetOfTaxAccumulatedOtherComprehensiveIncomeLossDefinedBenefitPensionAndOtherPostretirementPlansNetOfTax

Reference

Regulation S-X Rule 5-02.30 (Other stockholders' equity); ASC 220

Source

Reported in SEC EDGAR filings (US-GAAP XBRL taxonomy)

Accumulated other comprehensive income (AOCI) is the running total of a company's other comprehensive income, reported as a separate component of shareholders' equity on the balance sheet. It holds the after-tax gains and losses that have been recognized but kept out of net income, and it is shown as accumulated other comprehensive loss when the balance is negative.

AOCI does to other comprehensive income what retained earnings does to net income: each period's OCI is added to it, and amounts reclassified into net income are taken out.

Regulation S-X Rule 5-02.30 lists accumulated other comprehensive income among the captions of stockholders' equity, and companies disclose the balance by component, such as foreign currency translation, available-for-sale debt securities, cash flow hedges, and pension and postretirement plans, together with the amounts reclassified out of each. In XBRL filings the total is tagged AccumulatedOtherComprehensiveIncomeLossNetOfTax, with component elements such as AccumulatedOtherComprehensiveIncomeLossForeignCurrencyTranslationAdjustmentNetOfTax.

Because the balance is after tax and unrealized, it can move sharply without any change in the business. A strengthening dollar reduces the translated value of foreign subsidiaries; rising interest rates cut the fair value of fixed-rate debt securities; a fall in discount rates or asset returns can increase pension deficits. Each flows into AOCI rather than earnings.

For analysis, AOCI explains differences between book value and the sum of paid-in capital and retained earnings. Book value per share and return on equity both include it, so a large AOCI loss can depress book value while leaving earnings untouched. Banks are the clearest case: unrealized losses on available-for-sale securities in AOCI reduce reported equity even when the securities are expected to be held and repaid at par.