Section 1: 30–40%1A3
Statement of Comprehensive Income
Exam insight
Comprehensive income is where the exam hides the OCI-versus-net-income trap. The single most-tested distinction: unrealized gains and losses on available-for-sale DEBT securities go to OCI, while unrealized gains and losses on EQUITY securities run through net income (post ASU 2016-01). Miss that, and you will misclassify the item, miscompute comprehensive income, and often mishandle the reclassification adjustment when the security is sold.
What AICPA wants you to know
- 1Define comprehensive income and explain how it relates to net income
- 2List the five OCI items tested on the FAR exam and know where each comes from
- 3Explain accumulated OCI (AOCI) and how it appears on the balance sheet
- 4Describe the two presentation options for comprehensive income
- 5Apply reclassification adjustments to avoid double-counting in comprehensive income
Patterns in this topic
The exam re-skins the same archetypes. Recognize these here, then drill them in the Pattern Lab.
Exam tip
Study smarter: before you expand each card, cover the screen and try to recall what the concept means from its title alone. Retrieving it from memory builds the recall the exam actually tests, and it beats re-reading.