The change in this item is reported in the cash flow statement, and is important because it is one of the ways in which cash flow can differ from net income. It accounts for activities such as stock-based compensation and barter.
Stock-based compensation is an expense. But the company providing this compensation issues stocks to its executives, rather than giving them cash. As a result, a difference between net income and cash flow arises -- since net income decreases, while the cash flow remains unchanged.
The item is used as a bucket for activities that can not be classified as a change in working capital, change in deferred taxes, or change in depreciation & amortization.
Company ABC pays $50 million in salaries and compensation, of which $40 million is in cash and $10 million is in stock-based compensation. Even though the company reports an expense of $50 million, it actually ends up spending $40 million in cash. This creates a difference of $10 million between operating cash flow and net income. In order to reconcile the two numbers, the company would have to report $10 million as a change in other non- cash operating items.