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ACCA Applied Knowledge · Financial Accounting · Subsidiaries

Alpha owns 75% of the equity shares of Beta. In the consolidated statement of financial position, how is the non-controlling interest in Beta's net assets presented?

Non-controlling interest is shown within consolidated equity, separately from the equity attributable to the parent's owners. It is not a liability, because the group has no obligation to transfer assets to those minority holders, and it is not netted against goodwill or reserves.

  1. AWithin equity, separately from equity attributable to owners of the parentCorrect
  2. BAs a non-current liability
  3. CAs a deduction from goodwill
  4. DAs a deduction from consolidated retained earnings only

Explanation

Under IFRS 10, non-controlling interest is presented within equity, separately from the equity attributable to the owners of the parent. It is not a liability because the group has no obligation to repay it. Deducting it from goodwill or retained earnings would misstate the group equity.

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