Can you please explain where minority interest comes from on the - ProProfs Discuss
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Can you please explain where minority interest comes from on the earnings statement?

Asked by Lacey, Last updated: Oct 22, 2021

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John Smith

John Smith

John Smith
John Smith

Answered Sep 08, 2016

When a corporation owns more than 50% of another company, all of the subsidiarys financial information is consolidated into the parent companys financial statements. The problem is, even though 100% of the subsidiarys financials are accounted for, the parent may not own 100%. so a non-cash adjustment is made in the earnings statement to reflect the portion owned by someone other than the parent company. So, minority interest is the flip side of equity income. The equity income on the parents balance sheet would likely show up as the minority interest on some other companys income statement.

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