Minority interest
This query is : Resolved
27 May 2015
Please explain the term of minority interest in simple language.
27 May 2015
Holding company holds majority of the shares and hence is the majority shareholder. All the other shareholders together are called minority shareholders.
The shareholders' funds which belong to such minority is referred to as minority interest. If holding company holds 80% then minority interest will be 20% of equity shareholders' funds. Equity share holders' fund = equity capital, accumulated profits/losses, profit/loss on revaluation, etc.
An interesting point is that minority interest will include FULL preference share capital IF the holding company does not hold any preference shares. If the holding company holds 80% of equity shares & 50% of preference shares then minority interest will be 20% of equity shareholders funds PLUS 50% of preference share capital.
Minority interest = shareholders' fund belonging to other than the holding company.
The shareholders' funds which belong to such minority is referred to as minority interest. If holding company holds 80% then minority interest will be 20% of equity shareholders' funds. Equity share holders' fund = equity capital, accumulated profits/losses, profit/loss on revaluation, etc.
An interesting point is that minority interest will include FULL preference share capital IF the holding company does not hold any preference shares. If the holding company holds 80% of equity shares & 50% of preference shares then minority interest will be 20% of equity shareholders funds PLUS 50% of preference share capital.
Minority interest = shareholders' fund belonging to other than the holding company.
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