oci

hi

can someone please let me know if my understanding here is correct?

for FAS, say the corridor is 50 and the cumulative loss is 60, then 10 needs to be amortised over, say, the future working lifetime of the actives, say 20 years, so 0.5 is to be recognised each year in the P&L. The remaining 59.5 of the loss goes into the OCI (Other Comprehensive Income). I consider this 59.5 to be UNrecognised and is carried forward to next year. Next year then, it'll be added to any gain or loss incurred next year, compared against next year's corridor and so on.....so anything in the OCI is UNrecognised....

but then, for IAS 19, my notes (which I can only assume i copied from the core reading) talk about the OCI being analogous to the STRGL under FRS 17....but the STRGL contains gains and losses we are recognising. So are they saying that the OCI under IAS 19 contains gains and losses being recognised? I always think of the OCI as being UNrecognised gains and losses...

thanks a mill.

Barney.

 

Recognition

Hi Barney,

... all you probably need to do here is say what you mean by "recognised".
ie WHERE it is recognised
ie do you mean recognised in the P&L or in the STRGL or the OCI etc.

For example for FRS17, I assume you mean "recognised" as in recognised in the STRGL.

Whereas, for IAS19, the accounting chapter describes two methods:
1) P&L
2) OCI

Under method:

1) you might say it's unrecognised in the P&L, even though it's been recognised in the OCI

whereas under method

2) you'd probably say it was recognised in the OCI.


Best wishes

Stuart

 

Just to expand on Stuart's response to cover FAS

Recognised has multiple meanings here,
the 59.5 is recognised in the sense that it is placed somewhere;
It is effectively recognised on the Balance sheet (as under FAS the actual funding position is disclosed); but
it is only gradually recognised under earnings (gains/losses in AOCI in excess of corridor amortised over FWL via NPPC)

And note that AOCI and OCI are different.

 

thank you for your responses ...

i think i had mis-understood what "recognised" meant....

to me, "recognised" meant the gain/loss went through the P&L. and then for FRS 17, instead of recognising the gain/loss in the P&L, you recognise it in the STRGL. But in fact, gains/losses can be "recognised" anywhere it seems...

 

hey, could you please clarify what is the difference between the OCI and the AOCI?

 

AOCI is accumulated OCI, i.e. AOCI at year end = AOCI at year start + OCI in the year - Amortisation