UK GAAP Groups · Track 2 · Tutorial 1 of 3

Measure NCI at its share of net assets

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When the group buys control of a company but not all of it, FRS 102 measures the non-controlling interest at its share of the company’s identifiable net assets. Goodwill is then only the group’s own. There is no fair value option, so every acquisition is recorded the same way.

You will needThe new company in your hierarchy, loaded and mapped, as in Buy a new subsidiary. The NCI accounts set up, as in Account for minority shareholders.

By the endCompany F’s acquisition recorded with the NCI at its share of net assets, and the goodwill and NCI agreeing with the purchase price allocation.

1Know how the NCI is measured

In September 2026, Your Group buys 80% of Company F for 960,000. The purchase price allocation values Company F’s identifiable net assets at 1,000,000.

The NCI	Its 20% of the identifiable net assets: 20% of 1,000,000, so 200,000.
Goodwill	The investment cost plus the NCI less the net assets at fair value: 960,000 + 200,000 − 1,000,000 = 160,000. It is only the group’s goodwill; none of it belongs to the NCI.

IFRS also allows the NCI at its own fair value, which would put part of the goodwill on the NCI. FRS 102 doesn’t, so no valuation of the NCI is needed. Under FRS 102 goodwill is also amortised, over its useful life.

2Record the acquisition

Open Ownership & Equity → Ownership, and click Company F in Group structure.
Under Share purchases and sales, click + Record, then Bought shares.
Choose Your Group as Parent entity, Sep 2026 as the Month, 80 as the % transacted, and Subsidiary.
Enter the Investment cost (960,000) and Net assets at date (fair value) (1,000,000), in the group currency.
Keep NCI measurement on Share of net assets (partial goodwill), and click Add Record.

The measurement FRS 102 requires (1).

NCI measurement appears only on the record that gives the group control, and it starts on Share of net assets. Don’t choose Fair value of NCI for a group reporting under UK GAAP.

Then open Totals and accounts for this company and choose the investment and goodwill accounts, as in Buy a new subsidiary.

3Check the goodwill and NCI

Open Company F’s Totals and accounts for this company.
Open Reports → All Reports → Consolidated Balance Sheet for 2026.

Check

Acquisition goodwill shows 160,000. On the UK GAAP balance sheet, Non-Controlling Interests includes Company F’s 200,000 plus its share of Company F’s profit since September.

After the purchase, the NCI takes its 20% of Company F’s profit and other changes in equity.

4If something goes wrong

Goodwill is higher than the cost plus the NCI’s share, less the net assets	The record was saved with Fair value of NCI. Edit it, choose Share of net assets (partial goodwill), and click Save Changes.
Net assets at date (fair value) is required for the acquisition that establishes control.	Enter the net assets at fair value from the purchase price allocation.
NCI measurement isn’t in the dialog	The record doesn’t give the group control — for example, it is a later purchase in a company the group already controls, or it is set to JV / Associate.
Bargain purchase gain appears instead of goodwill	The investment cost plus the NCI is less than the net assets at fair value. Check the figures against the purchase price allocation.
The goodwill is wrong after the valuation is finalised	Edit the ownership record with the final figures, and click Save Changes.

Want more detail? See the documentation

NCI — Non-Controlling Interest NCI Report Organisation Hierarchy

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