Accounting

How To Present Non Controlling Interest In Consolidated Financial Statements

The Non Controlling Interest (NCI) is entitled to a share of consolidated equity because it is a contributor of equity to the consolidated group. Since, the consolidated equity is affected by profits and losses made in relation to transactions within the group, the calculation of the NCI is affected by the existence of intra-group transactions. In other words, the Non Controlling Interest (NCI) is entitled to a share of the equity of the subsidiary adjusted for the effects of profits and losses made on intra-group transactions.

A parent shall present its Non Controlling Interest (NCI) in the consolidated statement of financial position within equity, separately from the equity of the owners of the parent.

IAS 1 Presentation of Financial Statements confirms these disclosures.  It requires the profit or loss and other comprehensive income for the period to be disclosed in the statement of profit or loss and other comprehensive income, showing separately the comprehensive income attributable to non controlling interests, and that attributable to owners of the parent.

Note that in terms of the various line items in the statement, such as revenues and expenses, it is the total consolidated amount that is disclosed. It is only the consolidated profit and comprehensive income that is divided into parent share and NCI share.

The total comprehensive income for the period must be disclosed in the statement of changes in equity, showing separately the total amounts attributable to owners of the parent and to non controlling interests.

Note that the only line item for which the Non Controlling Interest must be shown is the total comprehensive income for the period. There is no requirement to show the NCI share of each equity account.

Para 54(q) of IAS 1 requires disclosure in the statement of financial position of the total NCI share of equity while paragraph 54(r) requires disclosure of the issued capital and reserves attributable to owners of the parent.

In the statement of financial position, only the total NCI share of equity is disclosed, rather than the NCI share of the different categories of equity. The NCI share of the various categories of equity and the changes in those balances can be seen in the statement of changes in equity.

Note that the consolidated assets and liabilities are those for the whole of the group; it is only equity that is divided into parent and NCI shares. Non Controlling Interest was previously known as Minority Interest.

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