This free, guided checker walks your finance team through the key decision points for IFRS 10 Non-Controlling Interests. Answer a few questions to see the likely treatment and the evidence to document.
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This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
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Consolidation and NCI apply only where the parent controls the investee under IFRS 10.7 - power over the relevant activities, exposure to variable returns, and the ability to use power to affect those returns - and other parties hold the residual interest. IFRS 10.22 then requires NCI to be presented within equity, separately from the equity of the owners of the parent. The common trap is presenting a joint arrangement or associate as a consolidated subsidiary; those are accounted for under IFRS 11 or IAS 28, not as NCI.
Without control there is no consolidation or NCI; account for the interest under IAS 28, IFRS 11, or IFRS 9 as appropriate (IFRS 10.6-7).
Official guidance: IFRS issued standards
IFRS 3.19 gives the acquirer a choice, for each business combination, to measure present-ownership NCI at acquisition-date fair value (IFRS 3.19(a), which attributes a share of goodwill to NCI) or at the NCI's proportionate share of the acquiree's identifiable net assets (IFRS 3.19(b), with no goodwill attributed to NCI). Determine and document which basis was elected for this combination. The common trap is confusing the two bases when computing goodwill, or applying the choice to NCI components that are not present-ownership interests, which must be measured at fair value.
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Official guidance: IFRS issued standards
IFRS 3.19 lets the acquirer choose, for each business combination, to measure present-ownership NCI at fair value or at the proportionate share of the acquiree's identifiable net assets; the choice is available on a transaction-by-transaction basis, but all other components of NCI are measured at acquisition-date fair value. Confirm the elected basis was applied to the present-ownership NCI and that other components used fair value. The common trap is assuming the same basis must be used for every combination, or applying the proportionate-share option to NCI components that are not present-ownership interests.
Realign the acquiree's NCI to the basis elected for this combination under IFRS 3.19; present-ownership NCI on the elected basis and other NCI components at fair value.
Official guidance: IFRS issued standards
IFRS 10.B94 requires profit or loss and each component of other comprehensive income to be attributed to the owners of the parent and to NCI, and IAS 1.81B requires the statement of profit or loss and OCI to present that allocation. Base the attribution on the ownership percentages, adjusting for any cumulative preference shares (IFRS 10.B95) and intragroup eliminations. The common trap is allocating only net profit and omitting the split of each OCI component or of total comprehensive income.
Attribute profit or loss and each OCI component between parent owners and NCI (IFRS 10.B94; IAS 1.81B).
Official guidance: IFRS issued standards
IFRS 10.B94 requires total comprehensive income to be attributed to the owners of the parent and to NCI even if this results in the NCI having a deficit balance; losses are not capped at the NCI's carrying amount. Continue attributing the NCI share of losses into a negative balance. The common trap is stopping loss allocation once the NCI balance reaches zero, which overstates the loss attributed to the parent.
Attribute subsidiary losses to NCI, including into a deficit balance, under IFRS 10.B94.
Official guidance: IFRS issued standards
Under IFRS 10.23, changes in a parent's ownership interest that do not result in loss of control are equity transactions; IFRS 10.B96 requires adjusting the carrying amounts of the controlling and non-controlling interests to reflect the change, with any difference between the adjustment and the fair value of consideration recognised directly in equity attributable to the parent. Do not remeasure the subsidiary's assets, liabilities, or goodwill, and do not recognise a gain or loss. The common trap is recording a gain or loss on a partial disposal or step-up while control is retained.
Treat the ownership change while control is retained as an equity transaction with no gain or loss (IFRS 10.23; IFRS 10.B96).
Official guidance: IFRS issued standards
When present-ownership NCI is measured at fair value (IFRS 3.19(a)), goodwill computed under IFRS 3.32 includes the NCI's share of goodwill (the full goodwill method); when NCI is measured at the proportionate share of identifiable net assets (IFRS 3.19(b)), goodwill reflects only the parent's share. Confirm the goodwill computation matches the NCI measurement basis elected. The common trap is grossing up goodwill for NCI when the proportionate-share basis was elected.
Use the interactive tool above to see how this applies to your situation.
Official guidance: IFRS issued standards
IFRS 10.22 requires NCI to be presented within equity, separately from the equity attributable to the owners of the parent, and IAS 1.54(q) requires a separate NCI line in the statement of financial position. Confirm the NCI balance is classified within equity and not as a liability or a mezzanine item. The common trap is presenting NCI outside equity or aggregating it with parent equity.
Present NCI as a separate component of equity, distinct from parent equity (IFRS 10.22; IAS 1.54(q)).
Official guidance: IFRS issued standards
IFRS 10.B86(c) requires intragroup assets, liabilities, equity, income, expenses, and cash flows to be eliminated in full, and profits or losses from intragroup transactions recognised in assets (such as inventory or property, plant and equipment) to be eliminated in full. Reflect the NCI share of any eliminated unrealised profit in the attribution. The common trap is eliminating only the parent's share of an intragroup profit rather than the full amount.
Eliminate intragroup transactions and unrealised profits in full and reflect the NCI share (IFRS 10.B86).
Official guidance: IFRS issued standards
When a parent loses control of a subsidiary, IFRS 10.25 and B98 require it to derecognise the subsidiary's assets, liabilities, and NCI, recognise any retained investment at its fair value at the date control is lost, and recognise the resulting gain or loss in profit or loss - this is not an equity transaction. Assess each ownership change to determine whether control is retained (equity transaction under IFRS 10.23) or lost (IFRS 10.25). The common trap is treating a disposal that crosses the control boundary as an equity transaction and omitting the gain or loss and the fair-value remeasurement of the retained interest.
Use the interactive tool above to see how this applies to your situation.
Official guidance: IFRS issued standards
IFRS 12.12 requires disclosure, for each subsidiary that has NCI material to the reporting entity, of the name, principal place of business, proportion of ownership and voting rights held by NCI, profit or loss allocated to NCI, accumulated NCI, and summarised financial information (IFRS 12.B10-B11). Prepare the NCI schedule for each material subsidiary. The common trap is disclosing only the aggregate NCI figure without the required subsidiary-level information.
NCI measurement, attribution, equity transactions, presentation, and IFRS 12.12 disclosures are complete. Complete the IFRS 12.12 NCI disclosure note for each material subsidiary (IFRS 12.B10-B11).
Official guidance: IFRS issued standards
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