is it classified as equity?
I would think liability. It is the amount of the equity in the consolidated company that you don’t own.
Yea i think it’s a liability.
LIABILITIES AND STOCKHOLDERS’ EQUITY Current Portion of LTD 6,676,112 Tenant Security and Other Deps 2,313,665 Unsecured Line of Credit - Trade Accounts Payable 23,165,110 Current Portion Def Ent Fees - Accrued Expenses 49,231,291 Deferred Revenue 18,993,805 Refundable EF Current 3,500 Other Current Liabilities 1,713,648 Dividend Payable - Total Current Liabilities 102,097,132 Long Term Debt less Curr Port 804,393,335 Deferred Gains 8,933,348 LT Def Entrance Fees - Deferred Lease Liability 20,203,239 Deferred Income Taxes 44,889,490 Other Long Term Liabilities 21,153,726 Unsecured Line of Credit - Total Liabilities 1,001,670,269 Minority Interests - Total Liabilities & Minority Interest 1,001,670,269 Common Stock 10,000 Additional Paid Capital 333,820,764 Retained Earnings (73,788,250) Accumulated Other Compre. (2,015,032) Income Statement - Total Stockholders’ Equity 258,027,482 Total Liabilities and Stockholders’ Equity 1,259,697,751 Most def in Liabilities.
Minority interest is not a liability. It typically is shown as a separate section between liabilties adn shareholders’ equity. If anything its more like equity than liability. It represents the shareholder equity in a company that you have consolidated, but own less than 100% of (its the difference between 100% and the percentage you own). It has no stated maturity, no due date. Much more equity-like in character.
Super, Would it be a contra account to equity? Trying to understand how it could be equity when you are saying it is the amount of the consoldiated company that you don’t own.
i don’t think its a contra account…
Minority interest is the noncontrolling interest in less than wholly-owned consolidated subsidiaries = 1-%owned by the parent company (the one with more than 50%). Say you own 90% of a company, 10% is controlled by the minority interest. You consolidate/add the assets and liabilities, revenues and expenses of the company owned, and the piece of that equity that you don’t own, and is minority interest, is part of shareholder’s equity under IFRS, but it appears “on the mezanine”, between liabilities and equity under US GAAP.
I just looked it up, and surprise, Super is right. Schweser says it is a liabilty (that is what I thought). CFAI says (p. 45) “In some respects, minority interest can be considered equity for purposes of analysis…Generally, the creditors and sharholders of the parent cannot benefit from the assets of the subsidiary without respecting the claims of its creditors and minority holders. Thus, minority interest occupies a special positiosn and should not mechically aggregated with EITHER liabilities or equity.”