1.2 Scope
ASC 810-10-20 defines a noncontrolling interest as the “portion of equity (net
assets) in a subsidiary not attributable, directly
or indirectly, to a parent.” Consequently,
noncontrolling interests are presented only in the
consolidated financial statements of a parent
whose holdings include a controlling interest in
one or more subsidiaries it partially owns.
Noncontrolling interests in a partially owned
subsidiary are not recognized in the subsidiary’s
own financial statements (see Section
3.2).
Since a noncontrolling interest is defined as a specific “portion of equity” (emphasis added), the
first step in the identification of a
noncontrolling interest is to establish whether
such ownership interest in the subsidiary is
appropriately classified in the equity section of
either the subsidiary’s balance sheet or the
parent’s consolidated balance sheet (see Section
3.3).