What Is a Non-Controlling Interest?

A non-controlling interest (NCI) — sometimes called a minority interest — is the share of a subsidiary's net assets and results that the parent does not own. When a parent controls but doesn't wholly own a subsidiary, the consolidated accounts still include 100% of the subsidiary's assets, liabilities, income and expenses, then separately show the portion attributable to the NCI.

Where does NCI appear?

• In the consolidated statement of financial position — NCI is shown within equity, separate from the parent's equity.
• In the consolidated statement of profit or loss — profit is split between the amount attributable to the parent's owners and the amount attributable to the NCI.

How is NCI measured?

At acquisition, IFRS 3 allows a choice for each acquisition: measure NCI at its fair value (the 'full goodwill' method) or at its proportionate share of the subsidiary's identifiable net assets (the 'partial goodwill' method). The choice affects the goodwill figure, so questions often specify which to use.

Updating NCI at the reporting date

The closing NCI is the acquisition-date value plus the NCI's share of post-acquisition profits and other movements, less its share of any goodwill impairment where the full method is used.

NCI is a staple of ACCA FR and SBR consolidations, and small errors in the measurement basis ripple through goodwill and equity. Practising full consolidations and marking them against the official ACCA scheme with The 50% Club shows you exactly where your NCI workings slip — so you can lock in the marks.