Fun Minority Interest In Profit And Loss Account

In the consolidated profit and loss account minority interest is that proportion of the results for the year that relate to the minority holdings.

Minority interest in profit and loss account. The correct place to put it in the profit and loss account is in my experience and in my opinion where you say. If there is a loss in subsidiary company then share of loss of minority interest is recorded in the credit side of this account as under. AS 21 Consolidated Financial Statements defines minority interest as that part of the net results of operations and of the net assets of a subsidiary attributable to interests which are not owned directly or indirectly through subsidiaryies by the parent.

On the other hand Accounting Standards AS use the term minority interest and not NCI. A non-controlling interest is also specifically used in relation to subsidiary companies with equity interests owned by outside investors rather than the parent company. In ease of loss the Minority Shareholders Suspense Account should be debited and the Consolidated Profit and Loss Account credited.

The new thinking is that the minority stockholders arent owed anything. Minority Interest in Enterprise Value Calculation Enterprise Value has to be adjusted by adding minority interest to account for consolidated reporting on the income statement. The minority interest is disclosed on the face of the consolidated profit and loss account under Profit on ordinary activities after taxation.

The old thinking about minority interest was that it showed a financial liability that was owed to the minority stockholders. A minority interest exists whenever a parent company owns a controlling interest in a subsidiary but does not own 100 percent. These minority shareholders have a claim on the earnings and net.

Minority interests develop when businesses merge or a seller retains a small percentage of his recently sold company. A minority interest is ownership or interest of less than 50 of an enterprise. In calculating the minority interest the whole of the preference dividend is deducted from the subsidiarys profit after tax the resulting figure being the profit available for ordinary shareholders.

Minority Shareholders Ac Dr. The companys profit and reserves or loss will include both pre-acquisition and post-acquisition profits and reserves or losses. The remaining shareholders in the subsidiary constitute the minority interest.