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Administrator Guide
Last Updated: 2025-07-25
Concept: Noncontrolling Interest Calculation

Concept: Noncontrolling Interest Calculation

To calculate noncontrolling interest (NCI), Workday uses the:
  • Consolidating parent company of a company hierarchy.
  • Company ownership details of that company.
  • NCI elimination rules configured on the
    Maintain Elimination Rules
     task.
  • Run Noncontrolling Interest
     task.
  • Consolidation journal type.
When you access the
Run Noncontrolling Interest
 task, you select a company hierarchy. Workday uses the consolidating parent company of this hierarchy to determine the ownership structure for calculating NCI.
When you submit the task, Workday identifies the subsidiary companies that the consolidating parent company has full or partial ownership of, including subsidiaries in which it has indirect ownership through other subsidiaries. Workday applies the NCI elimination rules you configured on the
Maintain Elimination Rules
 task to create NCI results and NCI consolidation journals for every ownership combination in the ownership structure.
Workday calculates NCI for all ownership combinations, including wholly-owned subsidiaries, to enable accurate reporting on changes in ownership. Example: Company A has 100% ownership of Company B. Company A sells Company B on March 25. Company B remains in the company hierarchy until the end of the quarter, and is removed on April 1 for reporting purposes. By including this ownership in the NCI calculation, Workday can show 100% NCI for Company B for March 25 through March 31 in consolidated reporting.

NCI in Financial Reporting

Though Workday creates NCI results and NCI consolidation journals for every ownership combination in an ownership structure, it doesn’t display them all in financial reports. Workday only displays NCI journals when you run the report for a company hierarchy. Workday evaluates the companies in the selected hierarchy to determine which NCI consolidation journals to display.
Workday displays NCI consolidation journals for ownership combinations where a subsidiary company is in the hierarchy but the owner company is not.
Workday doesn’t display NCI consolidation journals for ownership combinations when:
  • The owner and subsidiary are both in the hierarchy.
  • The owner is in the hierarchy, but the subsidiary is not.
  • Neither the owner nor the subsidiary are in the hierarchy.

Example

PureGen owns a majority interest in 2 companies:
  • Green Solar.
  • Northern Ventures.
Another entity, Third Party, owns the remaining minority interest in those companies.
PureGen, Green Solar, and Northern Ventures are all part of the same company hierarchy, and PureGen is the consolidating parent company. Third Party, however, is not in the hierarchy.
When you calculate NCI for this hierarchy, Workday generates NCI results for all ownership combinations:
  • PureGen and Green Solar.
  • PureGen and Northern Ventures.
  • Third Party and Green Solar.
  • Third Party and Northern Ventures.
When you run a consolidated report for this company hierarchy, the report displays NCI results for the ownership combinations of:
  • Third Party and Green Solar.
  • Third Party and Northern Ventures.
The report displays these NCI results because Third Party is not in the company hierarchy.
The report doesn’t display results for the ownership combinations of PureGen and Green Solar, and PureGen and Northern Ventures, because PureGen and the subsidiary companies are all part of the company hierarchy.

Best Practices for Calculating NCI

We recommend that you calculate NCI for all companies that have ownership details. Some exceptions are cases where:
  • Very few companies have minority interests.
  • You don’t expect a wholly-owned company will ever have a minority interest.
  • The ownership structure is relatively simple, such as when there are no intermediary owner companies that have minority ownership.