Question 8 Explain non-controlling interest. Calculate the non-controlling interest to be presented in the consolidated financial...

Question 8

Explain non-controlling interest.
Calculate the non-controlling interest to be presented in the consolidated financial statement

Expert Solution

a. Non controlling interest or minority interest is value of shares of shareholders who are holding less than 50 % of the total number of shares. A company is called parent company of a subsidiary company when it holds more 50% of shares of the subsidiary company. If a company holds less than 50 percent of shares of another company, such holding is called non controlling interest and it is shown in the balance sheet as separate under under Shareholder's Equity. Example :- If Company A and Company B holds 80% and 20% of total shares in Company C, the holding of company B of 20% is non controlling interest and it is shown in the balance sheet of Company C. Minority interest is not a debt because there is no obligation for payment and it is not a equity because this does not have characteristics of equity.

b. Minority interest can be calculated as below.

ekkarill92 answered 2 years ago

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