1 Groups and consolidation: an overview

non-controlling interests (NCI)
. 
IFRS 10 defines 
non-controlling interest
as the 'equity in a subsidiary not attributable, directly or 
indirectly, to a parent'. 
(Appendix A). 
NCI is shown in the equity section of the consolidated statement of financial position (IFRS 10, para. 22) 
and is included in the consolidated financial statements at its 
fair value plus the NCI's share of post-
acquisition retained earnings and other reserves
.
Non-controlling interest 
$ 
Fair value of NCI at acquisition 
X 
Plus NCI's share of post-acquisition retained earnings (and other reserves) 

X
NCI at reporting date 
X 
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CHAPTER 24
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THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
 
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The existence of a NCI also has an impact on the calculation of group retained earnings as some of the 
retained earnings are owned by the NCI, as we have seen in the calculation above. Group retained 
earnings should only reflect the 
group's share
of the post-acquisition retained earnings of the subsidiary. 
The proforma for group retained earnings working is amended as follows.
Retained earnings 
 P Co 
 S Co 
$ 
$ 
Per question 
X 
X
Pre-acquisition retained earnings 
(X) 
 
Y 
Group share
of post-acquisition retained earnings: 
S Co (Y × %) 
X 
Group retained earnings 
X 
3.1 Goodwill and NCIs 
In the calculations of goodwill we have looked at so far, the parent company has acquired 100% of the 
shares in the subsidiary.
Where there is a NCI, the 
consolidated accounts show 100% of goodwill
even though the group does 
not 'own' all of it. This is consistent with the treatment of other assets and the concept of control. 
Because this is the case, we need to include the fair value of the NCI in our goodwill calculation. 
The proforma for goodwill will now look as follows. 
Goodwill 
$ 
$ 
Fair value of consideration transferred 
X