Comprehensive Income

FAR tests this mechanically: sort each item into net income versus OCI, or compute total comprehensive income. The classic tell is the PUFE bucket of OCI items — Pension/OPEB actuarial and prior-service adjustments, Unrealized gains/losses on available-for-sale debt securities, Foreign-currency translation adjustments, and the Effective portion of cash-flow hedges. (The “R” some banks add — revaluation surplus — is IFRS-only.) The favorite trap exploits ASU 2016-01: unrealized gains on equity securities with readily determinable fair values now run through net income, not OCI (older question banks may still route them to AFS/OCI).

Watch too for reclassification (“recycling”) adjustments, which move realized amounts out of OCI into net income so the gain isn’t double-counted. Don’t confuse the period flow with the cumulative balance: OCI is the current-period change, while accumulated OCI (AOCI) is the equity balance on the balance sheet. Fair value drives most OCI items, but measuring at fair value doesn’t dictate whether the change lands in OCI or net income. Presentation (ASC 220) is one continuous statement or two consecutive statements — never a standalone equity schedule.