Accumulated Other Comprehensive Income

RELATED WIKI ARTICLES
 
TOP CONTRIBUTORS

Accumulated Other Comprehensive Income (ACI) measures a company's income from unrealized gains and losses on securities, derivatives, currency hedges and unrealized pension liablities.

ACI is typically found on a company's balance sheet. It is important to note that ACI is not included in a company's net income, which is typically found on a company's income statement and measures gains and losses that have already been realized. Depending on the company, ACI can be a critical driver of shareholder's equity.

Example

In 2008 company ABC had shareholders' equity of $100MM. In 2008, the company generated $15MM in net income and paid no dividends. The company, however, invested $20MM in complex derivatives which have since fallen in value and are now worthless. The company's owner has not sold these derivatives yet, because he hopes that they will increase in value by the end of 2009. The company has a total unrealized loss or ACI of $20MM. As a result, the company's shareholders' equity for 2008 was $95MM ($100MM +15MM -$20MM).

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki