ECONOMICS

COST ACCOUNTING

FINANCIAL TERMINOLOGY

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
A shareholding of less than 50% in another company.
A
Minority interest
B
Parent company
C
Off-balance-sheet accounting
D
Ratio
Explanation: 

Detailed explanation-1: -A minority interest is less than 50 per cent ownership or interest in a company. The word can apply to either stock ownership or a shareholding interest in a company. An investor or other entity other than the parent company holds a minority interest in a company.

Detailed explanation-2: -Minority interest is an ownership stake in a corporation that is less than 50%. This portion is held by an individual or organization that is not the parent company or the main actors of the business.

Detailed explanation-3: -Minority shareholders are those who hold less than 51% of the shares in a corporation. Both publicly traded and privately held companies have shareholders. However, the rights of minority shareholders in closely held corporations may be more subject to oppression than those of shareholders in public companies.

Detailed explanation-4: -The value of the minority ownership portion of the subsidiary is determined by multiplying its book value by the percentage of ownership held by non-controlling interests.

Detailed explanation-5: -A minority interest refers to the portion of a company not owned by the parent company or majority shareholder. While any ownership stake under 50% qualifies, the minority interest typically holds 20-30% of the company in question.

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