Minority Interest

Minority Interest
Minority Interest
A significant but non-controlling ownership of less
than 50% of a company's voting shares by either
an investor or another company.

Minority Interest
NAV = Total Assets Total Liabilities Minority Interest

CNAV1 = Good Assets Total Liabilities - Minority Interest

CNAV2 = Good Assets + 50% x (IGA) Total Liabilities - MI

Minority Interest
COMPANY A BALANCE SHEET
Assets
Cash

Liability

$500

Loan

$200

Shareholder Equity

Total

$500

Paid In Capital

$300

Total

$500

Minority Interest
No.

Activity

Company A Buy 80% of Company B

COMPANY B BALANCE SHEET

Assets
Cash

Liability

$100

Loan

$20

Shareholder Equity

Total

$100

Paid In Capital

$80

Total

$100

Minority Interest
Calculation of Buy Out
NAV for Company B

$80

80% of Company B

$64

20% of Company B

$16

Minority Interest
Consolidated Balance Sheet (A+B)
Assets
Cash

Liability

$536

Loan

$220

Shareholder Equity

Total

$536

Paid In Capital

$300

Minority Interest

$16

Total

$536

Loan = $200 (Loan A) + $20 (Loan B) = $220

Minority Interest
Consolidated Balance Sheet (A+B)
Assets
Cash

Liability

$536

Loan

$220

Shareholder Equity

Total

$536

Paid In Capital

$300

Minority Interest

$16

Total

$536

Cash = $500 (Cash A) + $100 (Cash B) - $64 (Cash

for Buy Out)

Minority Interest
Consolidated Balance Sheet (A+B)
Assets
Cash

Liability

$536

Loan

$220

Shareholder Equity

Total

$536

Paid In Capital

$300

Minority Interest

$16

Total

$536

Paid in Capital = $300 ( No change )

Minority Interest
Consolidated Balance Sheet (A+B)
Assets
Cash

Liability

$536

Loan

$220

Shareholder Equity

Total

$536

Paid In Capital

$300

Minority Interest

$16

Total

$536

Minority Interest = $16 (20% of Company B)

Minority Interest
Total Liabilities
Total Assets
Shareholders
Equity (NAV)
Minority Interest
NAV = Total Assets Total Liabilities Minority Interest
11

Minority Interest
NAV = Total Assets Total Liabilities Minority Interest

CNAV1 = Good Assets Total Liabilities - Minority Interest

CNAV2 = Good Assets + 50% x (IGA) Total Liabilities - MI

12

Minority Interest