“Non-controlling inerest on the balance sheet represents a position the company owns in other companies.”
Is this ture or not?
If it’s not correct, i want to know the why.
Holding company consolidates the financial statements ( i.e of Subsidiary and Associates) fully. In that process, positions controlled by other entities in Subs abd Associates are also consolidated in which holding has no right whatsoever. If i remember correctly the positions held by company in subs and asso is represented by invesment account on B/S. whereas the positions held by others in the same subs are represented by NCI in liability side of B/S.
Hope this helps
Non-controlling interest represents the portion of equity in a subsidiary that cannot be attributed to the parent.
Suppose Company X owns 60% of the shares of Company Y. A third party (unrelated to Company X) owns the remaining 40% of the shares of Company Y. Since Company X owns more than 50% of Company Y, it would consolidate the financials of Company Y into its own financial statements. The amount of non-controlling interest reported on Company X’s consolidated balance sheet would represent the 40% ownership by the third party.
BullishBear Finance
Not true.
If your company owns 60% of a subsidiary, someone else owns the remaining 40%. That’s the non-controlling interest: the interest in your subsidiary that is owned by someone else.
It used to be shown in an area on the balance sheet between liabilities and equity – known as the mezzanine – but now it is included in equity. That can be confusing as it’s not an ownership interest that our company has, but we’re stuck with it.
I understand that clearly.
Thanks for all of yours~!
My pleasure.