Dividends and Minority Interest
Hi all,
Sorry if this is a basic question as I'm teaching myself how to build out a 3 statement model.
Say company A acquires 90% of company B, and this is reflected in A's consolidated financial statements.
- If A pays dividends to its shareholders, the minority interest line in equity is not changed, right?
My thought is it would be deducted completely from the consolidated company's retained earnings, and the separate minority interest line under equity would not be impacted by the parent's dividend.
- If B pays dividends to its shareholders, how would the minority interest line in equity change?
My thought is that the minority interest equity line would decrease by 10% of the dividend paid by B, and for the retained earnings of the consolidated, it would decrease by 90% of the dividends paid by B.
As another side question, it should always be the case that for our case, 10% of the net income of the subsidiary goes to increasing minority interest line under equity, and 90% of it increases the retained earnings of the consolidated, right?
Thank you very much!
Non ad deserunt nostrum officiis placeat molestiae accusamus. Quia deleniti voluptatem ullam expedita excepturi. Cumque unde officiis expedita velit. Maxime laborum nostrum sapiente ut aspernatur eligendi. Quis qui nam nisi inventore quis quia aut. Libero laborum possimus maiores incidunt sunt est. Quia beatae dolorem sit nihil quisquam sed.
Sit sit nostrum ipsum. Ut omnis ut aut modi provident. Ut architecto incidunt ut officiis. Laboriosam nihil rem excepturi occaecati aut omnis rerum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...