Income Statement– Minority Interest

The income statement of a company shows the financial performance of the company over a specific period. Minority interest refers to the portion of the net income or loss of a subsidiary company that is not owned by the parent company. The minority interest is reported separately in the income statement to show the portion of the net income that belongs to the minority shareholders.

The income statement with minority interest is prepared in the following format:

Revenue
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Operating income
Add: Other income
Less: Interest expense
Earnings before taxes
Less: Income taxes
Net income
Less: Minority interest
Net income attributable to the parent company

The minority interest is deducted from the net income to arrive at the net income attributable to the parent company. This is done to show the portion of the net income that belongs to the parent company only. The minority interest is reported as a separate line item on the income statement to provide transparency and clarity to the financial statements.