How should the non-controlling interest's (NCI) share be treated upon the disposal of a subsidiary?

When a subsidiary is disposed of, the non-controlling interest's share must be included in the consolidated statement of profit or loss (SPL). This treatment reflects the economic reality of the transaction and the impact of the subsidiary's performance on the overall consolidated results prior to disposal.

Including the NCI's share in the consolidated SPL highlights the portion of profit or loss attributable to the non-controlling interest up to the point of disposal. This is aligned with the principle of consolidated financial statements that aim to provide a true and fair view of the financial position and performance of the entire group, including interests that are not wholly owned.

Additionally, the non-controlling interest's value should be derecognized from the balance sheet at the time of the disposal, along with the subsidiary’s assets and liabilities. It is crucial to recognize any gain or loss on the disposal transaction in the SPL, which will naturally include the NCI's share prior to the disposal.

The other options do not appropriately reflect the accounting principles applicable in such situations, particularly ignoring or misrepresenting the NCI's role in the consolidated financial results.