Non-controlling interest

A non-controlling interest is an ownership position in a corporation that is not sufficiently large for an investor to exercise operational control over the entity. The bulk of all investors have a non-controlling interest, since the number of shares they own in proportion to the total is so small.

A non-controlling interest does not have to be one that has less than 50% of the shares outstanding. A lesser proportion of ownership can result in a person acquiring a board seat, which does provide a measure of control.

An investor with a non-controlling interest does not consolidate the results of the investee with its own financial statements.

Related Courses

Business Combinations and Consolidations
CPA Firm Mergers and Acquisitions
Mergers and Acquisitions