Pension accumulated other comprehensive income has one role in the employer's benefit accounting. Pension AOCI accumulates prior-service and gain-or-loss amounts not yet recognized in periodic cost, after applicable tax effects in the financial statements. Maintain layers by plan and source.
Apply it
An opening $2 million pretax loss plus $650,000 current OCI loss gives a $2.65 million ending pretax loss when all reclassifications are already included in current OCI.
Common mistake
Do not assume that aOCI is the current year's pension OCI. AOCI is the cumulative equity balance after current OCI, reclassifications, and related tax effects. That error would confuse a cumulative equity balance with one period's OCI activity.
Keep the boundary clear
AOCI is an equity component, not a second pension liability. Adding it to funded status recreates an obsolete accounting model and double counts the difference.
Authority
Read ASC 715-20-55-7 for AOCI and the recognized funded-status adjustment.
Put the concept to work
Apply this concept
- Explain and apply pension accumulated other comprehensive income within a reconciled employer benefit-plan workpaper using supplied authoritative and actuarial facts.
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- Pension other comprehensive income — Apply
To apply this concept: Required. This prior schedule supplies a required amount or classification.
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