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. Minority interest belongs to other investors and is reported on the consolidated balance sheet of the owning company between liabilities and Equity sections to reflect the claim on assets belonging to other, non-controlling shareholders. Also, minority interest is reported on the consolidated income statement as a share of profit belonging to minority shareholders.

A significant but non-controlling ownership of less than 50% of a company's voting shares by either an investor or another company.

2. A non-current liability that can be found on a parent company's balance sheet that represents the proportion of its subsidiaries owned by minority shareholders.

1. In accounting terms, if a company owns a minority interest in another company but only has a minority passive position (i.e. it is unable to exert influence), then all that is recorded from this investment are the dividends received from the minority interest. If the company has a minority active position (i.e. it is able to exert influence), then both dividends and a percent of income are recorded on the company's books.

2. If ABC Corp. owns 90% of XYZ inc, which is a $100 million company, on ABC Corp.'s balance sheet, there would be a $10 million liability in minority interest account to represent the 10% of XYZ Inc. that ABC Corp does not own.