Non-controlling interest, often called minority interest, is the equity in a subsidiary that does not belong, directly or indirectly, to the parent. Under IFRS 10 it is shown within equity in the consolidated statement of financial position, separately from the parent owners’ equity, and receives its share of the subsidiary’s profit or loss.
What is non-controlling interest?
When a parent controls a subsidiary but owns less than all of it, the consolidated financial statements still include 100% of the subsidiary’s assets, liabilities, income and expenses. The part owned by other shareholders is the non-controlling interest, or NCI. IFRS 10 defines it as equity in a subsidiary not attributable, directly or indirectly, to a parent.
IFRS 10 sets three presentation rules. NCI is presented within equity, separately from the equity of the owners of the parent (paragraph 22). Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the NCI, even if that leaves the NCI with a deficit balance (paragraph B94). And a change in the parent’s stake that does not lose control is an equity transaction, so it creates no gain or loss in profit (paragraph 23).
How is non-controlling interest calculated?
- Measure it at acquisitionFor ownership interests that give a proportionate share of net assets on liquidation, IFRS 3 (paragraph 19) lets the acquirer choose, for each business combination, either fair value or the NCI’s proportionate share of the identifiable net assets.
- Add its share of profitEach period, attribute the NCI’s percentage of the subsidiary’s profit or loss and other comprehensive income.
- Deduct dividends paid to itDividends the subsidiary pays to its outside shareholders reduce the NCI balance.
- Adjust for ownership changesWhen the parent buys or sells shares without losing control, move the difference between NCI and parent equity, not through profit.
What does an NCI calculation look like?
Why does non-controlling interest matter for finance teams in the GCC?
Groups that hold subsidiaries with local partners, co-investors or founders who kept a stake report NCI every period. Getting it right affects the profit attributable to the parent’s owners, which is usually the figure boards and investors look at, and dividends to minority holders affect group cash. Exchange differences on a foreign subsidiary that is not wholly owned are shared with the NCI too. See foreign currency translation and our guide to group consolidation.
Questions people ask
Is non-controlling interest the same as minority interest?
Yes, in practice. Minority interest is the older term. IFRS uses non-controlling interest because what matters is whether the holder controls the subsidiary, not only the size of its stake.
Can non-controlling interest be negative?
Yes. IFRS 10 attributes losses to the NCI even if that results in a deficit balance (paragraph B94).
Is NCI a liability?
No. Under IFRS 10 it is presented within equity, separately from the equity of the owners of the parent.
Official and primary sources, read on the date shown. Rules change: confirm with the authority or your adviser before you act.
- AASB 10 Consolidated Financial Statements (August 2011), which incorporates IFRS 10: Appendix A definition of non-controlling interest, paragraphs 22 and 23, and paragraph B94 (read 9 October 2026)
- AASB 3 Business Combinations (compiled March 2020), which incorporates IFRS 3: paragraph 19 on measuring non-controlling interests at acquisition (read 9 October 2026)