Question

explain non controlling interest and give me example

Answer 1

Non controlling interest is also known as Minority interest. It is the portion of the equity ownership not attributable to the parent company. Non controlling interest refers to the ownership position wherein a shareholder holds less than 50% of the shares of the company or has no or little control over the decisions of the company.

Example of Non controlling interest:

Suppose, Google acquires 40 million shares or 80% shares of Microsoft for $ 1000.

In the above case, Google is the Parent company, which has controlling interest in Microsoft. As it holds more than 50% of the outstanding shares of Microsoft.

And the stockholders holding balance 20% of the shares of Microsoft would be Non controlling interest or Minority interest. As the stockholding is less than 50% of the outstanding shares. Hence, they would be referred as Non controlling interest.