1.4 Initial Recognition and Measurement of Noncontrolling Interests
Since a noncontrolling interest represents the portion of a subsidiary that is
not attributable to its parent, it is typical for noncontrolling interests to be
recognized for the first time upon the occurrence of any of the following:
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The initial consolidation of a subsidiary not wholly owned by the parent.
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The parent’s sale of shares in a wholly owned subsidiary over which the parent retains control after the sale.
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A subsidiary’s issuance of additional ownership interests to third parties, resulting in the dilution of the parent’s ownership interest while the parent still maintains control.
Chapter 5 of this
Roadmap provides interpretive guidance on the initial recognition and measurement of
noncontrolling interests arising when a parent first consolidates a partially owned
subsidiary (see Section
5.2) or the parent sells shares in a wholly owned subsidiary over
which the parent retains control after the sale (see Section 5.3).