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Minority interest in business is an accounting concept that refers to ownership of a company (subsidiary) that is less than 50% of outstanding shares.[1] Minority interest belongs to other investors and is reported on the consolidated balance sheet of the owning company to reflect the claim on assets belonging to other, non-controlling shareholders. Also, minority interest is reported on the consolidated income statement as a share of profit belonging to minority shareholders.
Minority interest is an integral part of the enterprise value of a company. The converse concept is an associate company.
Under IFRS, the minority interest is reported in the equity section of the consolidated balance sheet. Under US GAAP, the minority interest can be reported in the liabilities section, the equity section, or the "mezzanine section" of the balance sheet. The "mezzanine section" is located between liabilities and equity.
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