With 70% ownership and a subsidiary net income of 10, what is the Net Income Attributable to Noncontrolling Interests?

With 70% ownership and a subsidiary net income of 10, what is the Net Income Attributable to Noncontrolling Interests?

• A. 0
• B. 3
• C. 7
• D. 10

Answer: (B)

In consolidation, the noncontrolling interest is the portion of a subsidiary’s net income that isn’t owned by the parent. If the parent owns 70%, the noncontrolling interest owns 30%. Apply that to the subsidiary’s net income of 10: 0.30 × 10 = 3. So the Net Income Attributable to Noncontrolling Interests is 3. The other amounts would correspond to different ownership interpretations (0 would imply no NCI, 7 would be the parent’s 70% share, and 10 would be the entire net income).

In consolidation, the noncontrolling interest is the portion of a subsidiary’s net income that isn’t owned by the parent. If the parent owns 70%, the noncontrolling interest owns 30%. Apply that to the subsidiary’s net income of 10: 0.30 × 10 = 3. So the Net Income Attributable to Noncontrolling Interests is 3. The other amounts would correspond to different ownership interpretations (0 would imply no NCI, 7 would be the parent’s 70% share, and 10 would be the entire net income).