Minority intest in Acquisition Method- Difference in BS and IS

Hi All,

Can someone please explain why minority interest is added to the B/S but substracted from the I/S for the acquisition method? Schweser doesn’t really explain this.

Thanks in advance!

Minority interest is part of overall Company’s equity which belongs to minority shareholder group.

In consolidated Income statement the part of earnings which does not belong to majority shareholder - acquirer is deducted from IS.

By acquisition in consolidated balance A/L entries and equity position of target are offset with cash paid for target. The difference to balance are goodwill position and MI if exists. Otherwise BS after acquisition wouldn’t be in balance. Practice and you will see. There should be examples in CFAI material.

thank you!