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 ?
Amplitude Surgical (Paris: AMPLI) announced on Friday the acquisition of the remaining minority interest (40%) in its Brazilian subsidiary.
s stock to Jiulong Machinery Electricity as consideration for the acquisition of the minority interests.
Based on the parent-company concept, there are two kinds of classification for Minority Interest on the consolidated balance sheet: One is as a liability and the other is as mezzanine (neither liability nor capital).
As in the income approach, if the P/E multiple were derived from the public market, it likely would reflect a minority interest.
C must remove N's $100 net income on Part I, line 6a, and reverse on Part I, line 8, the elimination of N's $40 minority interest net income.
These discounts could be 25% or more depending on circumstances, and they could apply to discounts and fragmentation in addition to the minority interest discount.
Commissioner (69 TC 860, Nonacquiesced 1980-1 CB 2), wherein the government argued that the transfer by her estate to her husband of her interest in a closely held corporation should not have its value reduced because the amount transferred constituted a minority interest.
As can be seen on the "Levels of Value" table, the non-marketable minority interest (bottom level) is worth much less than the total marketable enterprise level (top level) because of control and marketability differences.
In this webinar, ExecSense examines everything you need to know about CEO best practices for selling a minority interest in your company and why many feel 2012 is a good year to potentially create some liquidity for yourself and/or investors.
M2 EQUITYBITES-August 25, 2016-Mirland Development Buys Minority Interests in Century Project
The class at that time wanted to examine the presentation of minority interest in controlled subsidiaries in the consolidated financial statements.
of Godley, (13) the Fourth Circuit upheld a Tax Court decision not to allow a minority interest discount for a 50% FLP interest, because there was little to be gained by having control of the partnership and little risk in holding a minority interest.

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