Accounting - Minority Interest

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Minority Interest

What is minority interest?

Total Answers and Comments: 3

Last Update: October 12, 2008 Asked by: s.l.narasimha rao

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Submitted by: naveenbharathraj

          Firstly we have to understand the meaning of Holding company &Subsidiary company.

Holding Company is those Company who holds majority (51%of share)or more than that of another Company is called as Holding company. And the company the shares of which are held is called Subsidiary Company.

           Holding company may not purchase all the shares of it's Subsidiary company when some of the shares of the Subsidiary company are held by outsider's the interest of that Subsidiary company is known as Minority interest

       The Minority interest must be calculatged and shown on the Liability side of the Consolidated Banlance Sheet.

         By ,Naveenbharathraj

Above answer was rated as good by the following members:
Venugopalnair_s

January 03, 2008 02:55:11

naveenbharathraj

Member Since: January 2008 Contribution: 3

RE: What is minority interest?

Firstly we have to understand the meaning of Holding company &Subsidiary company.

Holding Company is those Company who holds majority (51 of share)or more than that of another Company is called as Holding company. And the company the shares of which are held is called Subsidiary Company.

Holding company may not purchase all the shares of it's Subsidiary company when some of the shares of the Subsidiary company are held by outsider's the interest of that Subsidiary company is known as Minority interest

The Minority interest must be calculatged and shown on the Liability side of the Consolidated Banlance Sheet.

By Naveenbharathraj

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Overall Rating: +1

January 27, 2008 08:19:13

cashflow

Member Since: January 2008 Contribution: 2

RE: What is minority interest?

Minority interest in business is an accounting concept that refers to ownership of a company (subsidiary) that is less than 50 of outstanding shares.

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October 12, 2008 08:26:51

vasudeo007

Member Since: July 2008 Contribution: 64

RE: Minority Interest

Minority means lower than 50 .

Minority interest means the amount invested by minority.

Generally minority interest is never calculated. It is calculated only when one company takes other company over. Or in case of Mergers and amalgamations.

When there is major investor in the company he calculates the gains to him. The merged company also knows what it is supposed to pay to dominant company. But both these companies need to know what is the invested interest of the minority share holders.

So they calculate all dues to merging company and remaining amount is supposed to be the minority interest.

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