[I should be studying]

AOCI is an equity account, so a credit would increase the account and a debit would decrease it right?

I’m only confused because in the Becker lecture on pensions, Tim Gearty says “take out of AOCI” when the entry is a debit and again when it’s a credit (same thing when he says “put it into AOCI”).

Here’s an example:

An company retrospectively applies an increase in benefit payments, resulting in prior service cost of $1M:

Dr. OCI $1M <—- (“Put into AOCI”)

Cr. Pension benefit liability $1M

A pension gain is incurred

Dr. Pension benefit asset/liability

Cr. Other Comprehensive Income <—-(“Put into AOCI”)

Am I getting something confused? or does Tim just say “put into AOCI” when it comes first and “take out of AOCI” when you make a subsequent entry regardless of when you’re increasing/decreasing the account?

REG - 80 (2/28/13)
AUD - 68 (5/24/13), 84 (7/11/13)
BEC - 83 (8/29/13)
FAR - 70 (12/04/13) 80 (2/10/14)

[Anonymous]

Hey there…

So the reason why he says “put into AOCI” for the first entry is because when you DR OCI (reducing it) you have to CR AOCI for the same amount, thus putting it into AOCI

Secondly, I think on the second entry you meant to type “Take out of AOCI” The reason why he says this for the second entry is you have to DR.AOCI for the same amount you are CR OCI in order to move the amount out of AOCI…

I hope this makes sense 🙂

[Anonymous]

Hey there…

So the reason why he says “put into AOCI” for the first entry is because when you DR OCI (reducing it) you have to CR AOCI for the same amount, thus putting it into AOCI

Secondly, I think on the second entry you meant to type “Take out of AOCI” The reason why he says this for the second entry is you have to DR.AOCI for the same amount you are CR OCI in order to move the amount out of AOCI…

I hope this makes sense 🙂

[Whopper Warrior]

AOCI (Accumulated Other Comprehensive Income) is a reflection of company events, specifically GAINS and LOSSES, that are not ready to go on the income statement but still need to be presented.

Normal Income

DR Losses

CR Gains

AOCI

DR Losses

CR Gains

Question 1: “Resulting in additional prior service cost” roughly translates to a loss

Debit

Question 2: “pension gain”

Credit

Hypothetically, AOCI could have a debit balance if it is harboring a lot of losses not ready for the income statement.

ALL 4 parts passed summer 13
Ethics October 13
Experience (waiting)

Becker Only

[Whopper Warrior]

AOCI (Accumulated Other Comprehensive Income) is a reflection of company events, specifically GAINS and LOSSES, that are not ready to go on the income statement but still need to be presented.

Normal Income

DR Losses

CR Gains

AOCI

DR Losses

CR Gains

Question 1: “Resulting in additional prior service cost” roughly translates to a loss

Debit

Question 2: “pension gain”

Credit

Hypothetically, AOCI could have a debit balance if it is harboring a lot of losses not ready for the income statement.

ALL 4 parts passed summer 13
Ethics October 13
Experience (waiting)

Becker Only

[I should be studying]

Thanx guys, that helped a lot. I think some of my confusion was between OCI & AOCI, but the example I gave had to do with how he used the phrase “put into AOCI” both when he was putting a debit and credit to OCI. Ill just think of it like an equity-style gain/loss and ignore his crazy lingo.

REG - 80 (2/28/13)
AUD - 68 (5/24/13), 84 (7/11/13)
BEC - 83 (8/29/13)
FAR - 70 (12/04/13) 80 (2/10/14)

[I should be studying]

Thanx guys, that helped a lot. I think some of my confusion was between OCI & AOCI, but the example I gave had to do with how he used the phrase “put into AOCI” both when he was putting a debit and credit to OCI. Ill just think of it like an equity-style gain/loss and ignore his crazy lingo.

REG - 80 (2/28/13)
AUD - 68 (5/24/13), 84 (7/11/13)
BEC - 83 (8/29/13)
FAR - 70 (12/04/13) 80 (2/10/14)

[ColoradoCPA]

Could please somebody explain, maybe in general terms or example, the different between other comprehensive income, comprehensive income and accumulated comprehensive income? Is AOCI is the same a total shereholders' equity as of the balance sheet date? I understand that Comprehensive income = Net Income + other comprehensive income. I can not bring all these terms in one picture in my head. Thank you!!!

FAR 81 ✓
AUD 97 ✓
BEC 75 ✓
REG 84 ✓

[ColoradoCPA]

Could please somebody explain, maybe in general terms or example, the different between other comprehensive income, comprehensive income and accumulated comprehensive income? Is AOCI is the same a total shereholders' equity as of the balance sheet date? I understand that Comprehensive income = Net Income + other comprehensive income. I can not bring all these terms in one picture in my head. Thank you!!!

FAR 81 ✓
AUD 97 ✓
BEC 75 ✓
REG 84 ✓

[Anonymous]

You've pretty much got it right…

NI + OCI = Comprehensive Income

OCI gets closed out to AOCI just like NI closes out to RE at the end of the period…

Hope this helps.

[Anonymous]

You've pretty much got it right…

NI + OCI = Comprehensive Income

OCI gets closed out to AOCI just like NI closes out to RE at the end of the period…

Hope this helps.

[ColoradoCPA]

Thank you so much! It does make sense;)

FAR 81 ✓
AUD 97 ✓
BEC 75 ✓
REG 84 ✓

[ColoradoCPA]

Thank you so much! It does make sense;)

FAR 81 ✓
AUD 97 ✓
BEC 75 ✓
REG 84 ✓

[Author]

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