RECOGNIZING A MINORITY INTEREST IN CONSOLIDATED …

RECOGNIZING A MINORITY INTERESTIN CONSOLIDATED FINANCIAL STATEMENTSLEARNING OBJECTIVEA dapt the consolidation work sheet procedure to recognize a MINORITY 11 illustrates the consolidation procedure when the parent owns 100 percent of a subsidiary. Parentcompanies may, however, own less than 100 percent for several parent can gain control of a subsidiary with a smaller capital investment and therefore put less cap-ital at risk to loss. Parent companies generally gain control of a subsidiary when the ownership percent-age exceeds 50 percent. A 51 percent investment in a subsidiary requires less capital than a 100 shareholders of the subsidiary may be unwilling to sell their shares, so the parent cannot acquire100 MINORITY INTEREST exists whenever a parent company owns a controlling INTEREST in a subsidiary butdoes not own 100 percent. The remaining shareholders in the subsidiary constitute the MINORITY INTEREST .

(4) To recognize the 20 percent minority interests in the earnings and net assets of Company S. EFFECTS ON THE STATEMENT OF CASH FLOWS The consolidated income statement shows all the revenues and all the expenses of the less-than-wholly-owned subsidiary, but the parent cannot claim all the resulting income. The income statement, therefore ...

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  Interest, Consolidated, Minority, Minority interests, Minority interest in consolidated

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