What is minority interest?

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Minority Interest also referred to as non-controlling interest (NCI), is the share of
ownership in a subsidiary’s equity that is not owned or controlled by the parent
corporation. The parent company has a controlling interest of 50 to less than 100 percent
in the subsidiary and reports financial results of the subsidiary consolidated with its own
financial statements

For example, suppose that Company A acquires a controlling interest of 75 percent in
Company B. In this case the minority interest in Company B will be 25%. On its financial
statements, Company A cannot claim the entire value of Company B without accounting
for the 25 percent that belongs to the minority shareholders of Company B. Thus,
company A must incorporate the impact of company B’s minority interest on its balance
sheet and income statements.