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Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

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Plans & Membership

Our Platform

Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

More featured content

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Controlling vs Non-Controlling Interest

Controlling vs Non-Controlling Interest

Saket Modi

20 years: Chartered accountant & educator

In this video, Saket defines and compares the terms controlling and non-controlling interest, and discusses under which circumstances they may arise.

In this video, Saket defines and compares the terms controlling and non-controlling interest, and discusses under which circumstances they may arise.

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Controlling vs Non-Controlling Interest

4 mins 16 secs

Overview

In the financial statements, we often see references to “Group” Income Statement or a “Group” Balance Sheet. A “Group” means that the financial statements comprise of more than one entity and these are often referred to as consolidated financial statements. Controlling and non-controlling interest are different groups of investors. Non-controlling interest arises when one or more subsidiary companies are not fully owned by the parent company. The net income for the period, and the equity is split between controlling and non-controlling interest.

Key learning objectives:

  • What is controlling interest?

  • What is non-controlling interest?

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Summary

What is controlling interest?

Controlling interest represents the portion of the net income, and equity of the group that is attributable to the parent company’s shareholders. The parent company is one that controls one or more companies in the group.

If Company XYZ holds 60% of the ordinary shares of Company ABC, XYZ is the parent company and ABC is the subsidiary company. The group net income is shown as being attributable to the shareholders of XYZ and the 40% of ABC’s investors who do not form part of the group. When you add 60% of the net income of ABC to the entire net income of XYZ, the resulting figure reflects the share of the controlling interest in the group’s net income.

What is non-controlling interest?

Non-controlling interest is also referred to as minority interest. It represents the share of the net income of the subsidiary company that is attributable to the investors who do not form part of the group (40% of ABC’s investors in our example above).

The presentation of the net income split between controlling and non-controlling interests provides useful information since it tells us how much of the profits are attributable to each of these groups of investors.

Similar to net income, the total net assets or equity is split between controlling interests and non-controlling interests.

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Saket Modi

Saket Modi

Saket is a financial trainer and consultant based out of London. He specialises in advanced accounting, financial reporting and financial analysis, particularly with regards to International Financial Reporting Standards (IFRS), International Public Sector Accounting Standards (IPSAS) and Financial instruments.

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