How is noncontrolling interest included in equity for the consolidated financial statements?
Take the book value of the subsidiary and multiply by the noncontrolling interest. Noncontrolling interest is calculating as 100% less the percentage of the acquired entity that is owned by the parent.
For example, if the book value of the subsidiary is $100,000 and the noncontrolling interest is 25%, then noncontrolling interest on the balance sheet is $25,000. This would be recorded in stockholders’ equity but separate from the parent’s equity.
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How to calculate noncontrolling interest?
Noncontrolling interest (“NCI”), which is also known as minority interest, occurs when a company acquires more than 50% but less than 100% of the equity of another company. This is important because under the acquisition/consolidation method, a portion of the financial results cannot be claimed by the parent since they do not own 100% of […]