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Glossary/Accounting and GAAP

Other comprehensive income

Other comprehensive income covers gains and losses that GAAP records in equity instead of net income, such as translation adjustments and certain securities items, and it adds to net income to give comprehensive income.

CORAA TeamUpdated November 5, 2026

Definition

Other comprehensive income is the set of revenues, expenses, gains and losses that GAAP excludes from net income and records directly in equity. Common components include foreign currency translation adjustments, unrealized gains and losses on available-for-sale debt securities, certain pension items and effective cash flow hedge results. Net income plus other comprehensive income is comprehensive income. The cumulative balance is shown as accumulated other comprehensive income within equity.

Why it matters in an audit or review

Items in other comprehensive income are often estimates or fair values, so they carry measurement risk, and they bypass the income statement where reviewers look first. ASC 220-10 requires comprehensive income to be reported in one continuous statement or two consecutive statements, and reclassification adjustments out of accumulated other comprehensive income must be presented. The team ties the roll of the accumulated balance to the supporting schedules.

Example

Illustrative: net income is $500,000, translation gains are $50,000 and unrealized losses on available-for-sale securities are $20,000. Other comprehensive income is $30,000 and comprehensive income is $530,000.

Common mistakes

  • Failing to reclassify amounts to net income when the underlying item is sold.
  • Omitting the tax effect of each component.

Sources

  • FASB ASC 220-10, Income Statement, Reporting Comprehensive Income, Overall
  • Journal of Accountancy, FASB issues ASU 2011-05 on presenting comprehensive income (journalofaccountancy.com/news/2011/jun/20114267.html)

Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error

Standards

ASC 220-10

Related terms

  • Foreign currency translation
    Foreign currency translation converts a foreign entity's functional-currency statements into the reporting currency using current and average rates, with the resulting adjustment recorded in other comprehensive income rather than net income.
  • Statement of changes in equity
    The statement of changes in equity shows how each equity component moved during the period, including net income, other comprehensive income, share transactions and dividends, and ties opening to closing equity.
  • Fair value hierarchy
    The fair value hierarchy ranks inputs as Level 1 (quoted prices in active markets), Level 2 (other observable inputs) or Level 3 (unobservable inputs); a measurement takes the level of its lowest significant input.
  • Footing and cross-footing
    Footing is adding a column of figures to check the total. Cross-footing is adding across rows to check that the horizontal totals agree with the vertical ones.

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