Minority interest

Minority interest, also called non-controlling interest, is the portion of a subsidiary a parent company does not own, even though the subsidiary's full results are consolidated into the parent's financial statements. When a company owns more than half of another business but less than all of it, accounting rules still require reporting one hundred percent of that subsidiary's revenue and profit, then setting aside the outside owners' share as a separate line.

This matters for valuation because a company's reported profit can include income that does not fully belong to its own shareholders. A full enterprise value bridge adds minority interest as a separate claim on the business, alongside debt and preferred stock, because the consolidated EBITDA and cash flow used in the valuation include all of the subsidiary's results, so the outside owners' share of that value has to be counted too.