Non-controlling interest

Non-controlling interest is the share of a subsidiary’s equity that is not owned by the parent company. It arises when a parent controls a subsidiary but does not own 100% of it. You will see it only in consolidated (group) financial statements, not in the parent’s stand‑alone accounts.

In group accounts, non-controlling interest is shown within equity, and the share of the subsidiary’s profit or loss belonging to outside shareholders is presented separately. Dividends paid to these shareholders reduce the non-controlling interest balance but do not change control of the subsidiary.

What small businesses should know:

• It applies only if you prepare consolidated accounts for a group.
• It appears in the equity section, not as a liability.
• It includes the outside shareholders’ share of net assets and results.
• Buying or selling small stakes without losing control adjusts equity, not profit.