Other Comprehensive Income (OCI) is an item listed after "Net Profit" on the income statement. It serves to disclose potential earnings to investors but does not factor into current profit/loss calculations.

Breaking down the term: "Income" resembles profit, but differs in that profit reflects realized gains (e.g., from sold goods or incurred expenses), while OCI represents unrealized, paper gains—similar to floating profits/losses in stock trading. It's an equity account.

Example: You buy a stock at $10; it rises to $12—a $2 paper gain. Since you haven't sold, this unrealized gain remains volatile. Accounting adjusts the investment's value to $12, increasing assets by $2. To balance, equity rises by $2 temporarily.

OCI captures such temporary changes in net worth—holding gains/losses that could be realized but haven't been.

OCI Components:

Being transitional, OCI items fall into two categories based on future treatment:

1. Items NOT reclassifiable to profit/loss in subsequent periods:

   (1) Remeasurements of defined benefit pension plans;

   (2) Share of OCI from equity-accounted investees' pension remeasurements;

   (3) Fair value changes on equity investments designated at FVOCI (Fair Value Through Other Comprehensive Income), including foreign exchange gains/losses.

2. Items potentially reclassifiable to profit/loss later:

   (1) FVOCI debt instruments' OCI;

   (2) Financial asset reclassifications where OCI transfers to P&L per IFRS 9;

   (3) Equity-method long-term investments;

   (4) Reclassification of inventory/owner-used property to investment property;

   (5) Effective portions of cash flow hedge gains/losses;

   (6) Foreign currency translation differences.