Question

Within the equity section of the balance sheet, any non-controlling or minority interest would be best...

Within the equity section of the balance sheet, any non-controlling or minority interest would be best described as: a) minority interests the company has in joint ventures b) minority shareholders in subsidiaries that have been consolidated c) minority shareholders that have significant influence but less than 50 percent control

Homework Answers

Answer #1

Answet is b) minority shareholders in subsidiaries that have been consolidated

Explanation:

Whenever any company acquires 50% or more than 50% in any company then they consolidates the books of subsidiary company with holding company. In case of consolidation, full consolidation is done as if 100% is acquired and minority shareholders have been shown in balance sheet in equity side for the percentage they hold in subsidiary company. For example, Say company H acquires 60% in Company S. Company H will prepare consolidated financial statement in such a manner that it has acquired 100 % of Company H and minority shareholders of 40% will be shown in the equity side of consolidated balance sheet.

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