Minority (non-controlling) interest.

In plain English

A non-controlling interest is the portion of a majority-owned subsidiary's equity and earnings that belongs to outside shareholders rather than to the parent. When a parent controls a subsidiary it consolidates one hundred percent of that subsidiary's revenue, expenses, assets, and liabilities into its own statements. Because it does not own all of it, the statements then back out the outsiders' share on separate lines, one inside equity and one below net income. Net income attributable to the parent is the figure used for earnings per share. Ignoring the split overstates how much of the consolidated business the parent's shareholders actually own.

01Why it matters

A company can report revenue and assets that include a business it only owns most of, so reading the attributable lines is how you find out what your shares really have a claim on.

02The math, step by step

Say a parent owns 80 percent of a subsidiary that earns 10,000,000 dollars. The consolidated statements include all 10,000,000 dollars in revenue and profit, then subtract 2,000,000 dollars as income attributable to the non-controlling interest. Net income attributable to the parent is 8,000,000 dollars.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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