What is OCI and ICE?

August 2021

Top tutor Tom Clendon answers your accounting questions – he is such a great guy!

A student’s question

What is the difference between OCI and OCE?

Tom’s reply

OCI is an abbreviation for other comprehensive income. This is an annual performance statement so is prepared for the year ended. It is presented after the profit and loss account and together they form the statement of total comprehensive income.

The idea of OCI is that it will present certain gains and losses that have been recognised directly in equity during the year because accounting standards prohibit their recognition in the profit and loss account. An example of such a gain not included in the profit and loss account and thus appearing in OCI is a simple revaluation on property, plant and equipment. Other examples include group foreign exchange differences and remeasurement gains or losses on defined benefit pension schemes.

By reporting such gains and losses in OCI it ensures that users do get a faithful representation (complete) picture of all gains and losses recognised in the accounting period despite their omission from the profit and loss account. It also helps to keep the profit and loss account relevant (predicable) because the type of gains and losses in OCI tend to be unusual, non-recurring and unrealised gains.

OCE is an abbreviation for other components of equity. It is a reserve and therefore part of the equity of the company. As an equity reserve, it is a balance that is listed on the statement of financial position. Equity represents the owner’s interest in the business.

Every company will have share capital and retained earnings as part of their equity. OCE simply represents the rest!

OCE is therefore an umbrella term for various reserves. Its balance will include the accumulated gains and losses arising from revaluing property, plant and equipment as well as the exchange differences arising from the retranslation of overseas subsidiaries.

In addition, OCE can include items that have not passed through OCI; for example the equity element of a convertible loan and the difference arising in the group accounts when the parent and NCI transact with each other without control changing.


OCI reports gains and losses for the year that are excluded from that year’s profit and loss account. And OCE is a generic reserve on the statement of financial position that is not retained earnings.

• Tom Clendon is an online ACCA SBR tutor. See www.tomclendon.co.uk