Minority Interest

Minority interest refers to a situation in which one company holds less than 50% of another company's shares. This means the investing company does not have a controlling stake and cannot make major decisions but still possesses a significant portion of ownership. Minority interests are often seen in corporate structures where a larger firm invests in smaller companies. In financial reporting, minority interests are important as they reflect the portion of a subsidiary’s equity that is not owned by the parent company, impacting the consolidated financial statements and showing the stake of other shareholders.