Final answer:
Non-controlling interests represent shareholders with shares in a company who do not control it. They are part of consolidated financial statements, indicating a subsidiary's independence despite majority ownership.
Step-by-step explanation:
Non-controlling interests, according to AASB 10 Consolidated Financial Statements, refer to the portion of equity ownership in a subsidiary not attributable to the parent company. It represents the shareholders who own shares of stock in a firm but do not exert control over the company's financial and operating policies as the majority or parent shareholders do. These interests are important in the context of consolidated financial statements as they reflect the fact that the subsidiary is an independent entity despite being wholly owned by a parent company.
These venture capital firms or private investors may hold non-controlling interests in the companies that they invest in. While these investors do provide substantial early-stage capital, they do not necessarily seek to take over the day-to-day control of the firm. Additionally, shareholders can range from large institutional investors to small, individual investors and can include entities like venture capital firms that invest in small but rapidly growing companies.