ACCA FA Syllabus G. Preparing Simple Consolidated Financial Statements - Non-controlling interest (NCI) - Notes ^{5 / 11}

Fair value of non-controlling interest method (Full Goodwill)

This results in 100% of the goodwill being shown in the group statement of financial    position – that belonging to the shareholders of the parent and that belonging to the non-controlling interest.

As mentioned above, a parent may not own all of the shares in the subsidiary, e.g. if P owns only 70% of the ordinary shares of S, there is a non-controlling interest of 30%.

Accounting treatment

• In the consolidated statement of financial position, include all of the net assets of S

• Transfer back the net assets of S which belong to the non-controlling interest within the capital and reserves section of the consolidated statement of financial position. A proportion of goodwill on acquisition is also transferred back to the NCI.