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noncontrolling

Noncontrolling, in a corporate accounting context, refers to the portion of equity in a subsidiary that is not owned by the parent company. It is also called a minority interest. Noncontrolling interests arise when a parent acquires less than 100% of a subsidiary, leaving other investors with the remaining equity stake.

When a parent company has control of a subsidiary, the financial statements are typically consolidated. This

Measurement and presentation of noncontrolling interest vary by accounting framework but share common principles. At the

means
the
parent
reports
100%
of
the
subsidiary’s
assets
and
liabilities,
and
100%
of
the
subsidiary’s
revenues
and
expenses
in
the
consolidated
income
statement.
The
portion
of
equity
and
net
income
attributable
to
the
noncontrolling
shareholders
is
shown
separately
as
a
noncontrolling
interest
in
the
consolidated
balance
sheet
and
as
a
line
item
for
net
income
attributable
to
noncontrolling
interests
in
the
consolidated
income
statement.
Dividends
paid
to
noncontrolling
shareholders
reduce
the
NCI
balance.
acquisition
of
a
subsidiary,
the
noncontrolling
interest
is
recognized
and
initially
measured,
with
subsequent
changes
driven
by
the
subsidiary’s
net
income
or
loss
and
by
distributions
to
noncontrolling
holders.
Under
many
standards,
the
NCI
balance
increases
with
the
subsidiary’s
earnings
and
decreases
with
losses
and
with
distributions
to
noncontrolling
shareholders.
In
addition,
the
existence
of
NCI
affects
earnings
per
share
attribution
to
the
parent,
and
signals
the
presence
of
external
investors
with
governance
rights
in
the
subsidiary.