This is an accounting term for the amount of a balance sheet not owned by a firm's shareholders. This arises because of the way two companies' balance sheets are combined when one buys the other, following UK rules. Say, for example, A plc buys 75% of B plc. A now controls B as it has a majority of the voting shares.
In a consolidated' balance sheet, you combine 100% of the assets A now controls so all of A plc and B plc. But in the bottom of the balance sheet, in the shareholders' funds section, you show what is owned by A plc. This means 25% of the net asset value of B plc is shown as a "minority interest" as it is technically owned by outside shareholders.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Inheritance tax investigations catch out 1200 more families in HMRC crackdownWhere there is a suspicion inheritance tax has been underpaid, HMRC has extensive powers to check the deceased individual’s financial affairs and chase what is owed. Will you pay more?
-
Bank of England expected to cut interest rates despite sticky inflationEconomists and industry experts think that a weakening economy will force the MPC to stick to its cutting schedule in spite of inflation running above its target.
