Accumulated Other Comprehensive Income: Understand Forex Trading

Estimated read time 5 min read

Accumulated Other Comprehensive Income (AOCI) is an important part of a comprehensive income report. AOCI accounts for the unrealized gains and losses that arise from items such as foreign currency translation adjustments, available-for-sale securities, and various other gains and losses. These amounts do not reflect changes in a company’s net assets. It is reported in the equity section of a company’s balance sheet, but usually is not included when calculating certain ratios such as debt-to-equity ratio. AOCI helps companies to better understand their underlying businesses, and can be useful to analyze certain variables that cannot be reflected in the traditional financial statements.