Non-Controlling Interest

The equity in a consolidated subsidiary that is attributable to owners other than the reporting parent.

Why It Matters

Consolidated revenue, profit, assets, and liabilities can include one hundred percent of a controlled subsidiary even when the parent owns less than one hundred percent. Non-controlling interest is therefore essential when reconciling consolidated enterprise value, earnings attributable to the parent, and the economic claims of outside owners.

Reading the Measure

A working relation and an interpretive limit for corporate-finance use.

Interpretive caution

Do not combine fully consolidated operating results with an equity value that represents only the parent's ownership without adjusting for outside claims. Legal control, accounting consolidation, and economic ownership are related but distinct.

Accounting reference: IFRS Foundation: IFRS 3 Business Combinations