It stands for fair value through other comprehensive income; the gains/ losses resulting from assets measured at fair value due to changes in fair value-measured amounts. These changes are recognized initially in other comprehensive income (OCI). Examples include loans and receivables and investments in equity instruments measured at fair value. For the former, on derecognition or reclassification of such assets changes in fair value previously recognized in other comprehensive income (and accumulated in equity) are usually recycled to profit and loss (P&L). For the latter, dividends are recognized in profit and loss unless corresponding to recovery of a part of the principal, in which case recognition is in OCI. Changes in fair value- relating to investments in equity instruments- are recognized in OCI, and reclassification to profit and loss is not an option, even if the investments are sold or suffered impairment.

As a matter of practice, financial assets are classified and measured at fair value through other comprehensive income if these assets are held in a business model that is designed for both collecting contractual cash flows and trading in financial assets.