Minority interest

CFA Level II
#1

How do we calculate minority interest? A cookie for anyone with the best answer.

#2

[1-(parent’s ownership interest)] x net income (for the income statement) Please hold off for a couple of months (say mid-August), and then mail my cookie to: Skillionaire Level III Forum USA

#3

Under the consolidation method, Asset(total) = Asset(Parent) + Asset(Subsidiary) - Cash investment Does the Minority Interest come into account in this equation?

#4

I want to see the cookie first before I answer. What kind of cookie are we talking?

#5

skill nailed it. For starting Minority Interest on Consolidation take shareholder equity of firm you bought*part you dont own

#6

reg Wrote: ------------------------------------------------------- > Under the consolidation method, > > Asset(total) = Asset(Parent) + Asset(Subsidiary) - > Cash investment > > Does the Minority Interest come into account in > this equation? Nope, it doesn’t. You’d better pray you have two cookies.

#7

I want both of them. -Skillionaire aka The Cookie Monster aka Mind Like Water

#8

so when do we need Minority Interest (calculated from balance sheet)?

#9

“so when do we need Minority Interest (calculated from balance sheet)?” I’d kind of default to when they ask me for it, but that’s just me. All sarcasm aside, I don’t believe that you need that as an input for any formula, offhand - pretty much a “standalone”.

#10

Read the replies. Minority Interest is used in the consolidation method when calculating Net Income.

#11

Love the replies. You can all have brownie… points!

#12

Remember to differentiate between USGAAP and IFRS calcs for minority interest. I believe USGAAP take book value but the rest of the world looks at fair value.

#13

Watters Wrote: ------------------------------------------------------- > Remember to differentiate between USGAAP and IFRS > calcs for minority interest. I believe USGAAP take > book value but the rest of the world looks at fair > value. To add to that: Old GAAP - Proportionate sharexBV of Net Assets IFRS - Proportionate sharexMV of Net Assets New GAAP - Proportionate sharexImplied fair value of subsidiary