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Worked-example setupScope and assumptions
- Granite Harbor is the fictional calendar-year public-reporting lab entity; amounts are USD thousands for one annual teaching period.
- The $20,000 continuing-operations amount, $3,000 discontinued-operation loss, and two OCI component amounts are stipulated as correctly classified and net of applicable tax solely for articulation practice.
- The example does not establish that a real disposal qualifies, that an underlying item belongs in OCI, that reclassification is permitted, or that any tax amount is correct.
- All comprehensive income and equity are attributable to Granite Harbor's controlling shareholders; no noncontrolling interest, share issuance, repurchase, prior-period adjustment, or other equity transaction applies.
- Opening AOCI is $2,000 and Retained Earnings is $28,000; the $4,000 distribution reduces Retained Earnings and is not an expense.
- Period
- Year ended December 31 and positions at the beginning and end of the year
- Units
- USD thousands
- Rounding
- Whole USD thousands; no rounding required
Problem
Granite Harbor reports $120,000 of continuing revenues and $100,000 of continuing expenses. A qualifying disposed-component loss is $3,000 net of tax. OCI contains a $1,400 net-of-tax gain and a $400 negative reclassification adjustment. Opening total equity is $60,000, including $2,000 of AOCI. The company distributes $4,000 to owners. Prepare the performance bridge and close equity.
The classification and net-of-tax facts are stipulated. This example verifies the reporting arithmetic after those conclusions; it does not make them.
Five-line performance bridge
| Granite Harbor — performance bridge | USD thousands |
|---|---|
| Income from continuing operations ($120,000 − $100,000) | $20,000 |
| Discontinued-operation loss, net of tax | (3,000) |
| Net income | 17,000 |
| Other comprehensive income ($1,400 − $400) | 1,000 |
| Comprehensive income | $18,000 |
The $400 reclassification adjustment is shown with the sign supplied by the underlying schedule. The bridge does not claim that every OCI component uses the same reclassification pattern.
AOCI and retained-earnings rollforwards
| Equity component | Opening | Period movement | Distribution | Ending |
|---|---|---|---|---|
| Contributed Capital | $30,000 | — | — | $30,000 |
| Retained Earnings | 28,000 | Net income 17,000 | (4,000) | 41,000 |
| AOCI | 2,000 | OCI 1,000 | — | 3,000 |
| Total equity | $60,000 | Comprehensive income 18,000 | (4,000) | $74,000 |
Current OCI is $1,000; ending AOCI is $3,000 because the cumulative balance also contains $2,000 from earlier periods. No cash has been identified as an “AOCI reserve.”
Statement articulation
Ending assets are $120,000 and liabilities are $46,000. The balance-sheet residual is therefore $74,000, equal to the component equity rollforward:
$60,000 opening equity
+ 18,000 comprehensive income
- 4,000 owner distributions
= $74,000 ending equity
Retained Earnings receives net income rather than comprehensive income. AOCI receives the stipulated OCI. Combining both flows in Retained Earnings would leave total equity correct only if an offsetting classification error were made; the component matrix prevents that false pass.
What verification does and does not mean
The calculation verifies:
- $20,000 continuing income;
- $17,000 net income;
- $1,000 OCI;
- $18,000 comprehensive income;
- $3,000 ending AOCI; and
- $74,000 ending equity and equation balance.
It does not verify the disposal criteria, underlying OCI Topic, tax effects, ownership attribution, recognition, measurement, source populations, or note requirements. Those remain document and authority questions.
Quantitative companions
Choose from 2 ways to work with this calculation.
Verified calculation · financial statement articulation
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- activity
- 6 fields
Inspect data
{
"discontinued_operations": {
"disposed_component_loss_net_of_tax": -3000
},
"expenses": {
"continuing_expenses": 100000
},
"other_comprehensive_income": {
"debt_security_unrealized_gain_net_of_tax": 1400,
"reclassification_adjustment_net_of_tax": -400
},
"owner_distributions": {
"cash_dividends": 4000
},
"owner_investments": {},
"revenues": {
"continuing_revenues": 120000
}
}- ending
- 3 fields
Inspect data
{
"assets": {
"accounts_receivable": 30000,
"accumulated_depreciation": -17000,
"cash": 35000,
"equipment": 50000,
"inventory": 22000
},
"equity": {
"accumulated_other_comprehensive_income": 3000,
"contributed_capital": 30000,
"retained_earnings": 41000
},
"liabilities": {
"accounts_payable": 20000,
"debt": 26000
}
}- opening
- 3 fields
Inspect data
{
"assets": {
"accounts_receivable": 25000,
"accumulated_depreciation": -15000,
"cash": 30000,
"equipment": 40000,
"inventory": 20000
},
"equity": {
"accumulated_other_comprehensive_income": 2000,
"contributed_capital": 30000,
"retained_earnings": 28000
},
"liabilities": {
"accounts_payable": 18000,
"debt": 22000
}
}Recomputed result
| Measure | Value |
|---|---|
| comprehensive income | 18,000 |
| ending equation difference | 0 |
| ending total assets | 120,000 |
| ending total equity | 74,000 |
| ending total liabilities | 46,000 |
| equity rollforward difference | 0 |
| expected ending equity | 74,000 |
| income from continuing operations | 20,000 |
| net income | 17,000 |
| opening equation difference | 0 |
| opening total assets | 100,000 |
| opening total equity | 60,000 |
| opening total liabilities | 40,000 |
| total discontinued operations | -3,000 |
| total expenses | 100,000 |
| total other comprehensive income | 1,000 |
| total owner distributions | 4,000 |
| total owner investments | 0 |
| total revenues | 120,000 |