1.7 Presentation and Disclosure

The issuance of FASB Statement 160 (codified in ASC 810) clarified that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before FASB Statement 160 was issued, there was only limited guidance on how noncontrolling interests should be reported. FASB Statement 160 clarified that noncontrolling interests should “be reported in the consolidated statement of financial position within equity (net assets), separately from the parent’s equity (or net assets)”1 (see Sections 8.1 and 8.2). To provide additional clarity to common shareholders of the consolidated entity regarding their claim on the net assets of the consolidated entity, ASC 810-10 requires:

Separate presentation of consolidated net income and consolidated comprehensive income on the face of the consolidated financial statements. Additional detail must also be provided about the portions of each of these totals that are attributable to the parent and the noncontrolling interests, respectively (see Section 8.3).
Reconciliations of changes in stockholders’ equity that detail changes attributable to the parent and the noncontrolling interests, respectively (see Sections 8.5 and 8.5.1).
Disclosure of reallocations of AOCI between the parent and the noncontrolling interests (see Section 8.5.3).

Each of the presentation and disclosure requirements summarized above ultimately arises from the desire to clearly articulate for users of financial statements how changes in a reporting entity’s net assets affect the parent and noncontrolling interest holders.

While ASC 810-10 provides extensive presentation and disclosure guidance aimed at clearly depicting a noncontrolling interest holder’s claim on the net assets, net income, and comprehensive income of a consolidated subsidiary, no such presentation and disclosure requirements exist for the consolidated statement of cash flows (see Section 8.4).

Footnotes

Quoted from ASC 810-10-45-16.

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This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.