Other Comprehensive Income
Gains and losses excluded from net income that flow directly to equity, such as currency translation adjustments.
What is OCI?
Other comprehensive income (OCI) captures gains and losses that are excluded from net income but still affect stockholders' equity. Common components include unrealized gains or losses on available-for-sale securities, foreign currency translation adjustments, pension liability remeasurements, and gains or losses on cash flow hedges. OCI is reported in the statement of comprehensive income.
Example
Example
A US company holding €100 million in European bonds records a $3 million foreign currency translation loss in OCI when the euro weakens. This loss reduces stockholders' equity without affecting the income statement or reported net income.