Question

A minority investment or a minority interest refers to the non-controlling share in a company held by an investor or another company. For example, a private equity firm may have a non-controlling share in a company. The minority investment is usually less than 50% of the total outstanding shares of the company. The minority investment can be either minority passive interest or minority active interest.

How are the minority investments are reported under IFRS and US GAAP?

Answer 1

Minority interest reported under IFRS:

It is reported in the equity section of the consolidated balance sheet of parent company. . It should be shown seperate from the parent company's equity

Minority interest reported under US GAAP:

It is reported in the non current liability section or the equity section of the consolidated balance sheet of parent company.

extra points:

• minority passive interest : where the holding is 20% or less , the parent company has no material influvence in the company in which it has minority interest
• minority active interest : where holding is 21 % to 49% , the parent company has material influvence in the company in which it has minority interest