Non Controlling Interest Example

Non controlling interest Example

Non controlling interest is the interest of minority share or equity holder. The non controlling interest can be calculated by two different methods i.e. fair value method and net asset method.

Non controlling Interest fair value method Example

ABC Company acquired 70% shares in an entity and issued 20,000 shares @ 5. Calculate the non controlling interest.

Solution

Minority interest is = 100% - 70% (parent share) = 30%

30% x 20,000 x 5

= 30,000

Non controlling Interest Net Asset method Example

ABC Company acquired 70% shares in an entity, the net asset of entity is 250,000. Calculate the non controlling interest.

Minority interest is = 100% - 70% (parent share) = 30%

30% x 250,000

= 75,000