In the context of consolidation, what is referred to as 'non-controlling interest'?

Non-controlling interest refers specifically to the ownership interest in a subsidiary that is not held by the parent company. This is the portion of equity in a subsidiary that is owned by shareholders other than the parent company. In consolidated financial statements, the non-controlling interest is reported to show the equity attributable to those shareholders.

Understanding this concept is important for accurately reflecting the ownership structure of a consolidation. Even though the parent company has control over the subsidiary, the equity attributable to shareholders who are not part of the parent company must be clearly identified to provide a complete picture of the financial position of the consolidated entity. This inclusion ensures that financial statements are transparent and informative for all stakeholders.

In contrast, the other choices do not accurately define non-controlling interest. The interest owned by the parent company pertains to the controlling interest, total assets of a subsidiary refer to the financial resources owned, and goodwill generated is related to the excess of purchase price over the fair value of identifiable net assets acquired in a business combination. Each of these aspects is important in consolidation but does not define the non-controlling interest itself.