What does the fair value enterprise method assess in relation to non controlling interest?

The fair value enterprise method is a valuation approach that focuses on assessing the fair value of a company's total equity, including both controlling and non-controlling interests (NCI). In this context, the method specifically addresses how much the non-controlling interest represents in terms of value within the overall enterprise value of the subsidiary or group of subsidiaries.

By focusing on the fair value of shareholders' ownership of non-controlling interest, this method provides a meaningful assessment of how much that interest is worth in relation to the entire enterprise. This valuation aligns with the fair value concept under accounting standards, which emphasizes the importance of considering the market perspective of both controlling and non-controlling stakeholders.

In relation to the other options, while total liabilities, historical asset costs, and ownership structure ratios are relevant financial metrics, they do not directly relate to the fair valuation of shareholders' equity in the context of non-controlling interests. The fair value enterprise method specifically targets the valuation of interests, making it a crucial tool in financial reporting for entities with partially owned subsidiaries.