What is minority interests in SAP FI-LC - Consolidation?

SAP Term: minority interests

• Component: FI-LC

• Component Name: Consolidation

• Description: The portion of an FS item's value, which belongs to a consolidation unit that is not controlled by the corporate group. Minority interest is computed during consolidation of investments and is recorded on separate items in the consolidated financial statements. The system performs the following computations: Minority interest in equity capital The amount is derived from the equity of proportionally consolidated companies or subsidiaries, and is stated on the equity side of the balance sheet, either as a single accumulated figure or as separate figures differentiated by the equity's breakdown into capital stock, retained earnings, etc.. Minority interest in annual net income Minority interest in investments This is the difference between the investment book value and the group share of the upper unit. Minority interest in investments is a characteristic of simultaneous consolidation and is normally disclosed with minority interest in equity capital.

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• Key Concepts: 
  Minority interests refer to the portion of a company’s equity that is not owned by the parent company. In the context of SAP FI-LC Consolidation, minority interests are accounted for in the consolidation process. This means that the parent company’s financial statements must include the minority interest’s share of the consolidated entity’s profits and losses. 
  
  How to use it: 
  In SAP FI-LC Consolidation, minority interests are accounted for in the consolidation process. The parent company’s financial statements must include the minority interest’s share of the consolidated entity’s profits and losses. This is done by creating a separate account for minority interests in the consolidation process. The account should be set up to reflect the minority interest’s share of profits and losses. 
  
  Tips & Tricks: 
  When setting up a minority interest account in SAP FI-LC Consolidation, it is important to ensure that all transactions related to the minority interest are recorded accurately. This includes any dividends paid out to the minority interest as well as any other transactions related to the minority interest. 
  
  Related Information: 
  For more information on how to set up a minority interest account in SAP FI-LC Consolidation, please refer to SAP Help documentation or contact your local SAP consultant.