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minority interest

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Financial Dictionary

Minority Interest

A significant but non-controlling ownership of less than 50% of a company's voting shares by either an investor or another company.

Investopedia Commentary

In accounting terms, if a company owns a minority interest in another company but only has a minority passive position (i.e. it is unable to exert influence), then all that's recorded from this investment are the dividends received from the minority interest. If the company has a minority active position (i.e. it is able to exert influence), then both dividends and a percent of income are recorded on the company's books.

Related Links

Knowing Your Rights As A Shareholder
What Owning A Stock Actually Means

See also: Balance Sheet, Consolidate, Dividend, Net Operating Income, Voting Shares

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Financial Dictionary

minority interest

  1. In accounting, the ownership by the parent company of less than 100% of an affiliated firm.

  2. A proportional ownership of a firm that is insufficient to constitute control. Generally, minority interest is viewed as ownership of less than 50% of the voting shares.


Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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