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What events require accountants to use the account called accumulated other comprehensive income (AOCI) and how...

What events require accountants to use the account called accumulated other comprehensive income (AOCI) and how does using AOCI affect Net Income?

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Answer #1

Accumulated other comprehensive income is a general ledger account that is classified within the equity section of the balance sheet. It is used to accumulate unrealized gains and unrealized losses on those line items in the income statementthat are classified within the other comprehensive income category.

Accumulated other comprehensive income (AOCI) accumulates other comprehensive income (OCI), which records unrealized and realized gains and losses from certain transactions. Unrealized means paper gains and losses, which are usually not part of the net income calculation for a small business. Accumulated other comprehensive income is part of the shareholders' equity section of the balance sheet, while other comprehensive income and net income are part of the income statement.

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