Non-controlling interest

Non-controlling interest is the portion of a subsidiary's equity not owned by the parent, presented separately within equity on the consolidated balance sheet and allocated its share of the group's profit each period.

ByHoang TruongUpdated July 3, 2026

FrameworkConsolidation

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A subsidiary with €500,000 of net assets is fully consolidated into the group accounts, because control — not percentage ownership — determines consolidation scope. Of that €500,000, the parent's 80% stake accounts for €400,000, while the remaining 20%, €100,000, belongs to outside shareholders and is shown separately as non-controlling interest within group equity.

Where it fits

SubjectFinancial AccountingAdvancedTopicThe Accounting Equation & Its ElementsAdvancedTopicThe Financial StatementsAdvanced

The formula

LaTeX

\text{NCI} = p_{\text{NCI}} \times \text{FV of Identifiable Net Assets}

Variables

$p_{N} C I$: Non-controlling ownership percentage at acquisition date (decimal)
$F V o f I d e n t i f iab l e N e t A sse t s$: Fair value of the subsidiary's identifiable assets less liabilities at acquisition (€)

Proportionate share method; the alternative full goodwill method measures NCI at its own fair value, producing a higher NCI balance and higher goodwill.

Check yourself

PracticeCORE

Capella Group consolidates its only subsidiary, in which it holds a 70% interest. In the consolidated financial statements, how is the non-controlling interest (the remaining 30%) presented on the consolidated balance sheet?

Select an answer to check your understanding.