Other Comprehensive Income OCI Formula + Examples
A firm’s liability for pension plans increases when the investment portfolio recognizes losses. Once the gain or loss is realized, the amount is reclassified from OCI to net income. For example, a large unrealized loss from bond holdings today could spell trouble if the bonds are nearing maturity. For financial analysts and investors, understanding the unrealized gains and losses in OCI is crucial as it provides insights into the potential risk and return profile of the company’s investments. AUD CPA Practice Questions: Supply and Demand, Elasticity, and Profit Maximization Insurance…
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