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.
1. 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.
2. 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!
Voluptatum quae omnis corrupti unde. Sed accusantium eligendi itaque rem repellendus. Ex praesentium et deleniti. Ducimus distinctio voluptatem mollitia est voluptas necessitatibus exercitationem. Distinctio inventore eum et quidem vitae adipisci. Assumenda saepe dolore praesentium quisquam.
Repellendus nulla nam voluptatem fugit accusamus ut est. Reiciendis enim ut molestiae nostrum. Et quasi numquam omnis. Aut voluptas amet iusto nihil et excepturi qui. Sint aliquid rerum nemo ut nihil et consequatur.
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...