Last reviewed: July 2026.
Non-controlling interest (NCI), formerly called minority interest, is the equity in a subsidiary not attributable directly or indirectly to the parent. It is presented within consolidated equity separately from the equity attributable to owners of the parent.
NCI participates in post-acquisition profit, other comprehensive income, dividends and other equity movements.
Where NCI appears
| Statement | NCI presentation |
|---|---|
| Consolidated statement of financial position | Separate component within equity |
| Profit or loss and OCI | Profit and total comprehensive income attributed to parent owners and NCI |
| Statement of changes in equity | Opening balance, profit, OCI, dividends and ownership changes |
| Notes | Material NCI information and restrictions under IFRS 12 |
Acquisition-date measurement
For each business combination, IFRS 3 permits eligible NCI that represents present ownership interests to be measured at fair value or at the proportionate share of identifiable net assets.
The choice affects goodwill and later impairment allocation.
Full goodwill method
When NCI is measured at fair value, goodwill includes the portion attributable to both the parent and NCI.
A simplified formula is:
Consideration + fair value of NCI − fair value of identifiable net assets
Proportionate goodwill method
When eligible NCI is measured at its proportionate share of identifiable net assets, recognised goodwill relates only to the parent's interest.
The election is made transaction by transaction for qualifying NCI.
Worked acquisition example
A parent acquires 80% of a subsidiary. Identifiable net assets are 1,000,000 CU and NCI fair value is 230,000 CU. Consideration is 900,000 CU.
Full goodwill is:
900,000 + 230,000 − 1,000,000 = 130,000 CU
Under the proportionate method, NCI is 200,000 CU and parent-only goodwill is 100,000 CU.
Post-acquisition profit
NCI receives its share of subsidiary post-acquisition profit after relevant consolidation adjustments. Pre-acquisition reserves form part of acquisition-date net assets and do not enter group retained earnings.
Review the goodwill and pre-acquisition profits guide.
Additional depreciation and fair value adjustments
Acquisition-date fair value uplifts can create additional depreciation or amortisation. These adjustments reduce post-acquisition profit allocated to the parent and NCI.
Intragroup unrealised profit
When the subsidiary sells goods or assets to the parent, unrealised profit adjustments reduce subsidiary profit and therefore affect NCI. When the parent is the seller, the adjustment normally affects the parent's result.
Dividends paid to NCI
Dividends paid by a subsidiary to NCI reduce the NCI balance. Intragroup dividends to the parent are eliminated in consolidation.
Losses attributable to NCI
Profit or loss and OCI are attributed to parent owners and NCI even if this results in a deficit NCI balance, unless another requirement changes the accounting.
Goodwill impairment
Under full goodwill, impairment is allocated between parent and NCI based on ownership interests unless another basis is appropriate. Under proportionate goodwill, an adjustment may be needed to compare the cash-generating unit on a consistent basis.
See the goodwill and impairment guide.
Changes in ownership without loss of control
A purchase or sale of an ownership interest that does not cause loss of control is an equity transaction. Adjust the parent and NCI balances, and recognise the difference between consideration and the change in NCI directly in parent equity.
No new goodwill or profit-or-loss gain is recognised.
Loss of control
When control is lost, derecognise subsidiary assets, liabilities and NCI, recognise consideration and any retained interest, and record the resulting gain or loss.
Foreign operations
NCI shares in foreign-currency translation differences and other OCI according to the ownership interest and applicable requirements.
Material NCI disclosures
IFRS 12 requires information about material NCI, including ownership interests, accumulated NCI, profit allocated and summarised financial information for material subsidiaries.
Restrictions on transferring cash or assets within the group can also be significant.
Connection to group accounts
NCI is one part of the full consolidation process, which also includes control assessment, acquisition accounting, goodwill and intragroup eliminations.
Read the IFRS 10 group accounts guide.
Different classes of NCI
A subsidiary may have ordinary shares, preference shares, options or other ownership interests held outside the group. Allocation should reflect the contractual rights of each class rather than applying one percentage mechanically.
Indirect ownership
When a subsidiary is owned through another group entity, calculate effective parent and NCI interests carefully. Changes at intermediate levels can affect attribution even when ultimate control remains.
Transactions with NCI
Acquiring additional shares from NCI or selling shares without losing control changes equity attributable to the parent and NCI. The difference is not a business-combination gain or loss.
Consolidation controls
- maintain accurate ownership percentages and effective dates;
- separate acquisition-date and post-acquisition equity;
- track fair value adjustments and extra depreciation;
- allocate upstream unrealised profits correctly;
- reconcile NCI dividends and OCI;
- review changes in ownership and loss of control;
- prepare IFRS 12 disclosures for material NCI.
Common mistakes
- presenting NCI as a liability;
- allocating pre-acquisition profit to group retained earnings;
- ignoring extra depreciation on fair value uplifts;
- failing to allocate subsidiary-sold unrealised profit to NCI;
- recognising goodwill on ownership changes without loss of control;
- preventing NCI from becoming negative automatically;
- using the outdated term without explaining current presentation.
Related Accounting Support guides
Key takeaway
NCI is a separate component of consolidated equity. Measure it at acquisition, update it for adjusted post-acquisition results and account for ownership changes consistently.
Official references: IFRS 10 Consolidated Financial Statements, IFRS 3 Business Combinations, and IFRS 10 supporting material.