minority interest


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Minority interest

An outside ownership interest in a subsidiary that is consolidated with the parent for financial reporting purposes.

Minority Interest

1. A percentage of ownership in a company that is significant but does not give the owner the ability to control the company. In accounting, one includes only the dividends from a minority interest on a balance sheet, unless the owner has enough ownership to exert influence (but not outright control) over the company's direction. In that case, one includes both dividends and ordinary income on the balance sheet.

2. A liability on a parent company's balance sheet indicating the amount of a subsidiary that the parent company does not own. For example, if a parent company owns 95% of a subsidiary and the remaining percentage is publicly traded, the dollar amount of that 5% is recorded as a liability on the balance sheet.

minority interest

1. In accounting, the ownership by the parent company of less than 100% of an affiliated firm.
2. A proportional ownership of a firm that is insufficient to constitute control. Generally, minority interest is viewed as ownership of less than 50% of the voting shares.

Minority interest.

All shareholders whose combined shares represent less than half of the total outstanding shares issued by a corporation have a minority interest in that corporation.

In fact, in many cases, the combined holdings of the minority shareholders are considerably less than half of the total shares.

In another example, in a partnership, any partner who has a smaller percentage than another partner is said to have a minority interest. Under normal circumstances, it is difficult for those with a minority interest to have any real influence on corporate policy.

minority interest

that part of a subsidiary company's listed SHARE CAPITAL which is not owned by the HOLDING COMPANY. Where the holding company owns more than 50% of the shares of a subsidiary company then it is able to control that company, but where it owns less than 100% of the shares then the minority interest of other shareholders in the subsidiary company must be recognized. In compiling CONSOLIDATED ACCOUNTS the claims of minority interests in certain group assets located in subsidiary companies must be recognized, and their entitlement to a share in the profits of subsidiary companies must be allowed for. See PREACQUISITION PROFITS.

minority interest

that part of a subsidiary company's issued SHARE CAPITAL that is not owned by the HOLDING COMPANY. Where the holding company owns more than 50% of the shares of a subsidiary company, then it is able to control that company, but where it owns less than 100% of the shares, then the minority interest of other shareholders in the subsidiary company must be recognized, in particular their entitlements to a share in the profits of subsidiary companies.
References in periodicals archive ?
QuickLiquidity's founders purchased their first minority interest position in a commercial real estate partnership on the secondary market in 2009 and continue to provide a reliable exit strategy for investors looking to break free from their illiquid assets.
Under the economic concept, minority interest is a part of the consolidated equity of the entire economic unit.
On line 8, remove the $20 minority interest in the net income of DS1 ($100 x 20% minority interest).
The EITF reached a consensus that the sponsor's interest in the operating partnership should be reported as a minority interest in the REIT's consolidated financial statements.
619 F2d 410 (USCA 5), 46 AFTR 2d 81-6292 (1981) where, in a community property state (Texas) there was a transfer of a minority interest (decedent's undivided half of 55%) to members of the family.
Next, a lack of control (middle level) discount would be taken for valuation of a minority interest (for example, assume a 30-percent minority interest discount), reducing the value to $700,000, which is equivalent to a freely trading minority interest.
Everything you need to know in 60-minutes regarding CEO best practices for selling a minority interest in your company and why the next year is such an attractive time to do so
Further, family attribution is not a factor in determining the value of minority interests.
Rubright stated, "We are very pleased with the acquisition of the minority interest in GSD.
The elder generation typically retains control over the assets through its general partner interest and proceeds to gift its limited partnership interests to the younger generation, using substantial valuation discounts for gifts of minority interests.
12 /PRNewswire/ -- The New York Times Company today announced the divestiture of its minority interest in Gaspesia Pulp & Paper Company, a newsprint mill in Canada.
If McGraw demonstrates a 30 percent discount, as I read it," said Brooks, "the judge says that makes sense, but it ineludes both the illiquidity and minority interest -- a lack of control factor -- that we should consider.

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