What is Other Comprehensive Income (OCI)?
Other comprehensive income (OCI) comprises items of income and expense that IFRS requires or permits to be excluded from the income statement and instead recognized directly in equity, with some items later recycled to profit or loss and others permanently retained.
How It Works
- Common items: FX translation of foreign operations, FVOCI debt and equity instrument gains/losses, cash flow hedge effective portion, revaluation surplus on PP&E.
- Items that recycle to P&L: FX translation on disposal, FVOCI debt, effective hedges.
- Items that do not recycle: FVOCI equity instruments, revaluation surplus, actuarial gains/losses.
- Presented after profit for the year in the statement of comprehensive income.
Saudi Context
Saudi banks regulated by SAMA report large OCI movements from FVOCI Saudi government sukuk holdings as SAIBOR fluctuates. Saudi listed companies with foreign subsidiaries (SABIC, Aramco, Almarai) record FX translation OCI tied to USD, EUR, and other currency exposures. The OCI section is disclosed in the statement of comprehensive income alongside profit for the year.
Example
A Saudi bank holds Saudi government sukuk classified as FVOCI. When SAIBOR rises, the sukuk fair value declines by SAR 5,000,000. Entry: Dr OCI (fair value loss) 5,000,000, Cr FVOCI Investment 5,000,000. No P&L impact unless the sukuk is sold.