Minority Interest (Noncontrolling Interest)
Definition
Minority interest — formally noncontrolling interest (NCI) — is the portion of a consolidated subsidiary's equity that the parent does NOT own. When a parent owns more than 50% of a subsidiary, accounting rules require consolidating 100% of the subsidiary's financials, with the unowned slice shown as NCI in equity and as "net income attributable to noncontrolling interests" on the income statement.
It is added in the enterprise value bridge for consistency: because EBITDA and revenue include 100% of the subsidiary, EV must also reflect 100% of the claims on those results — including the piece owned by outside shareholders.
The mirror case is ownership between 20% and 50% (equity method): the stake appears as a single investment line, its income below EBIT, so its value is typically SUBTRACTED from EV (or excluded) since the metrics exclude its operations.
Why interviewers ask
"Why do you add minority interest to enterprise value?" is a classic consistency question — the expected answer is apples-to-apples with fully consolidated metrics. The trap is confusing noncontrolling interests (>50% owned subsidiaries) with equity-method investments (20-50%), which get the opposite treatment.
Related terms
Interviews don't test definitions — they test recall under pressure.
Drill 1,500+ real questions with spaced repetition. Free to start — 10 reps a day on the house.