Pension other comprehensive income has one role in the employer's benefit accounting. Pension OCI records current funded-status changes not recognized in periodic cost, including applicable prior-service amounts and asset or obligation gains and losses. Present pretax and tax effects consistently.
Apply it
A $600,000 prior service cost plus $400,000 obligation loss, less a $150,000 asset gain and $200,000 reclassification, produces a $650,000 current OCI loss.
Common mistake
Do not assume that pension OCI is another name for pension expense. OCI records specified current-period changes outside net income; periodic cost receives only the applicable current components and reclassifications. That error would collapse current non-earnings changes into pension cost and misstate comprehensive income.
Keep the boundary clear
Current OCI is a period flow. It is not the ending AOCI balance or an additional liability beyond recognized funded status.
Authority
Read ASC 715-30-35-21 for recognition of funded-status changes in OCI.
Put the concept to work
Apply this concept
- Explain and apply pension other comprehensive income within a reconciled employer benefit-plan workpaper using supplied authoritative and actuarial facts.
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Build on these ideas
- Net periodic pension cost — Apply
To apply this concept: Required. This prior schedule supplies a required amount or classification.
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- Pension accumulated other comprehensive income — Apply
Required level here: apply. Required. This prior schedule supplies a required amount or classification.