Which of the following items is classified as Other Comprehensive Income (OCI) under US GAAP?

Answer options:

Gain on sale of treasury stock.

Unrealized gain on available-for-sale debt securities.

Unrealized gain on equity securities.

Foreign currency transaction gain.

How to approach this question

Recall the 'PUFIER' mnemonic for OCI: Pension adjustments, Unrealized G/L on AFS debt, Foreign currency translation, Instrument-specific credit risk, Effective portion of cash flow hedges, Revaluation surplus (IFRS only).

Full Answer

B.Unrealized gain on available-for-sale debt securities.✓ Correct

Unrealized gains/losses on Available-for-Sale (AFS) debt securities are reported in OCI. Unrealized gains on equity securities are reported in Net Income.

Common mistakes

Confusing AFS debt with Equity securities; confusing Foreign Currency Translation (OCI) with Transaction gains (NI).

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