Minority interest

Minority interest (also known as Non-controlling interest) in business is an accounting concept that refers to the portion of a subsidiary corporation's stock that is not owned by the parent corporation. The magnitude of the minority interest in the subsidiary company is generally less than 50% of outstanding shares, else the corporation would generally cease to be a subsidiary of the parent.^[1] It is, however, possible (e.g. through special voting rights) that a controlling interest requiring consolidation be achieved without exceeding 50% ownership depending on the accounting standards being employed. Minority interest belongs to other investors and is reported on the consolidated balance sheet of the owning company to reflect the claim on assets belonging to other, non-controlling shareholders. Also, minority interest is reported on the consolidated income statement as a share of profit belonging to minority shareholders.

Minority interest is an integral part of the enterprise value of a company. The converse concept is an associate company.

Under IFRS the minority interest (non-controlling interest) is reported in the Equity section of the consolidated balance sheet. Under US GAAP, minority interest can be reported in the liabilities section, the equity section, or the mezzanine section of the balance sheet. The Mezzanine section is located between liabilities and equity

See also

Associate company (the converse concept) Articles of Incorporation Business valuation Consolidation (business) Drag-Along right

Equity method Pre-emption right Share capital Tag-Along right Voting interest

External links

• Minority Interest
• Minority Interest at Investopedia.com
• Minority Interests on the Income Statement—The Cost Method, Equity Method, and Consolidated Method

References

1. ^ http://www.groco.com/readingroom/bus_dloc_mid.aspx. The Minority Interest Discount

This accountancy-related article is a stub. You can help Wikipedia by expanding it.v · Categories: Corporations law Finance Generally Accepted Accounting Principles Mergers and acquisitions Accounting stubs Wikimedia Foundation. 2010. Игры ⚽ Нужно сделать НИР? Hurd Hatfield Austral Islands Look at other dictionaries: Minority interest — An outside ownership interest in a subsidiary that is consolidated with the parent for financial reporting purposes. The New York Times Financial Glossary * * * minority interest minority interest ➔ interest * * *    An important but non… …   Financial and business terms minority interest — An outside ownership interest in a subsidiary that is consolidated with the parent company for financial reporting purposes. Bloomberg Financial Dictionary * * * minority interest minority interest ➔ interest * * *    An important but non… …   Financial and business terms Minority Interest — 1. A significant but non controlling ownership of less than 50% of a company s voting shares by either an investor or another company. 2. A non current liability that can be found on a parent company s balance sheet that represents the proportion …   Investment dictionary minority interest — The interest of individual shareholders in a company more than 50% of which is owned by a holding company. For example, if 60% of the ordinary shares in a company are owned by a holding company, the remaining 40% will represent a minority… …   Accounting dictionary minority interest — The interest of individual shareholders in a company more than 50% of which is owned by a holding company For example, if 60% of the ordinary shares in a company are owned by a holding company, the remaining 40% will represent a minority interest …   Big dictionary of business and management minority interest — mažumos dalis statusas T sritis turto vertinimas apibrėžtis Nuosavybės dalis, suteikianti mažiau kaip 50 proc. verslo subjekto balso teisių. atitikmenys: angl. minority interest ryšiai: susijęs terminas – verslo subjektas šaltinis Tarptautiniai… …   Lithuanian dictionary (lietuvių žodynas) minority interest — *Equity ownership in a corporation controlled by another, dominant stockholder. Minority interests are rewarded by *dividend income and *appreciation in the value of *common stock, but they are normally unable to determine the strategic policies… …   Auditor's dictionary minority interest — Shares of stock in a corporation which are not sufficient in number to elect directors or otherwise control the action to be taken by the corporation. 18 Am J2d Corp § 496 …   Ballentine's law dictionary entity’s minority interest — mažumos dalis statusas Aprobuotas sritis buhalterinė apskaita ir finansinė atskaitomybė apibrėžtis Patronuojamosios įmonės akcininkų, negalinčių daryti lemiamo poveikio įmonės veiklai, nuosavo kapitalo dalis, nurodyta konsoliduotajame balanse, ir …   Lithuanian dictionary (lietuvių žodynas) public sector entity controlled entity’s minority interest — viešojo sektoriaus subjekto kontroliuojamo viešojo sektoriaus subjekto mažumos dalis statusas Aprobuotas sritis buhalterinė apskaita ir finansinė atskaitomybė apibrėžtis Kontroliuojamo viešojo sektoriaus subjekto grynojo perviršio ar deficito… …   Lithuanian dictionary (lietuvių žodynas) 18+ © Academic, 2000-2024 Contact us: Technical Support, Advertising Dictionaries export, created on PHP, Joomla, Drupal, WordPress, MODx. Mark and share Search through all dictionaries Translate… Search Internet Share the article and excerpts Direct link … Do a right-click on the link above and select “Copy Link”