What does the partial goodwill method represent under IFRS?

The partial goodwill method under IFRS represents the concept of valuing non-controlling interests (NCI) based on the fair value of the subsidiary's net identifiable assets. This method calculates NCI by taking the fair value of the subsidiary's net identifiable assets and multiplying it by the percentage ownership that the non-controlling interest holds.

This approach is significant because it allows for a clearer understanding of the true economic interest represented by the non-controlling shareholders. The partial goodwill method acknowledges that NCI is partly derived from the identifiable net assets of the subsidiary, which directly ties NCI to the underlying assets that generate value within the company.

In contrast, the other options do not accurately reflect how NCI is measured under the partial goodwill method. For instance, assessing NCI based on the total equity of the subsidiary or retained earnings does not adequately represent the economic value attributable to the non-controlling interest. The method's focus on net identifiable assets aligns with the principle that NCI reflects ownership in the assets of the company rather than a broader or less direct measure of value.