A non-controlling interest arises only when a parent company purchases:

Question

Quizplus · Accepted Answer

A non-controlling interest, also known as a minority interest, arises when a company purchases more than 50% but less than 100% of the stock of a subsidiary company. This indicates that the purchasing company has control over the subsidiary, but there are other shareholders who have some level of ownership and control as well. Options A and B are incorrect, as they describe scenarios where the parent company does not have a controlling interest and therefore would not have a non-controlling interest. Option D is incorrect, as acquiring all of the stock of a subsidiary would eliminate the possibility of a non-controlling interest.

A Non-Controlling Interest Arises Only When a Parent Company Purchases