What are majority and noncontrolling interests?

A majority interest reports the parent’s owner interest of less than 100% but more than 50% of the outstanding voting shares (control) in the subsidiaries that have been consolidated and included in the parent’s consolidated statements.  When subsidiaries are consolidated, the parent’s consolidated financial statements will combine all of the assets, liabilities, revenues and expenses of these less than wholly owned subsidiaries.

Owners’ Equity Section of a Consolidated Balance Sheet (Example)
Share Capital	104,000
Capital Reserves	36,476
Retained Earnings	756,193
Equity Attributable to Shareholders of the Parent	896,669
Noncontrolling Interests	42,204
Total Shareholders’ Equity	938,873

A noncontrolling interest (NCI) (minority interest) is the amount of the equity of consolidated subsidiaries (affiliates) that the parent company does not own, it being presented separately on a consolidated balance sheet.  Under IFRS, ordinary NCI are current ownership interests that entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation.

Initial Recognition of Noncontrolling Interests – US GAAP vs. IFRS
US GAAP	IFRS
NCI are generally initially measured at fair value at the date of acquisition.	The acquirer can elect to initially measure NCI at their proportionate interest in the net assets of the acquiree or at fair value at the date of acquisition.