I can’t sort it out…“other comprehensive income” includes all the changes in shareholders’ equity which arent recognized in the income statement. And since inception those changes cumulate in the “Accumulated other comprehensive income”.
These changes typically are: 1-forex G/L. 2-Unrealized G/L on available for sale securities. 3-Actuarial G/L on defined benefit Pension Plans 4- Changes in the “revaluation surplus” 5-Unrealized G/L on derivatives.
Comprehensive Income includes items which would be recognised in the traditional Income Statement, and thus have an impact on earnings, as well as items classified as Other Comprehensive Income, examples of which you correctly listed. Together, they give Total Comprehensive Income, which is presented in the Statement of Comprehensive Income.
What I suggest you do, is take the actual financial statement of a real company. I see you are from Italy, so let’s take FIAT’s 2012 consolidated financial statements. You will find them here:
On pg 121 you will find the Consolidated Statement of Comprehensive Income, weher you will see this being composed of Profit or Loss (as coming from the Income Statement) and Other Comprehensive Income to give Total Comprehensive Income at the bottom of the report.
At the same time, please read this old thread as well:
One more thing. In your original post you mentioned unrealized gains/losses on derivatives as one of the components of Other Comprehensive Income (OCI). Be careful with this item. As a rule, gains and losses on derivative instruments impact profit or loss, so they are presented withing the Income Statement (not OCI).
The only time when they do indeed impact Other Comprehensive Income is when the derivative instrument is used in a hedge accounting relationship called a cash flow hedge. This is why in that FIAT Statement of Comprehensive Income on pg 121, you will find an item called Gains/(losses) on cash flow hedges. These are unrealized gains or losses on derivative instruments but only those which are accounted for under specific hedge accounting rules.
It depends. If you have an effective hedge and meet the cash flow hedge requirements, unrealized gains and losses are shown through other comprehensive income.
Agreed, I just thought “As a rule” was misleading, because hedge accounting isn’t rare. But yes, I probably could have left this one alone as you do delineate later in your post.
Yes, the OCI which you see in the B/S is accumulated. You can see this stated in point 5. on pg 242 of your FRA Curriculum book (2014 edition) or on pg 229 (2013 edition).
take care!