Other comprehensive income includes only unrealized gains and losses. When a previously unrecognized gain or loss is recognized later, this gain or loss will always be included in the company's net income in the year recognized.

Question

Quizplus · Accepted Answer

This statement is incorrect. The previously unrecognized gain or loss may be recognized directly in other comprehensive income, and not included in the company's net income. Examples include unrealized gains or losses on available-for-sale securities, unrealized gains or losses on cash flow hedges and foreign currency translation adjustments.

Other Comprehensive Income Includes Only Unrealized Gains and Losses