Book Value Per Share Non Controlling Interest

Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.

Book value per share non controlling interest. Non controlling interest is a percentage of the company owned by shareholders less than 50 and thus have no control over decisions and don t carry voting rights. For example a company that is currently trading for 20 but has a book value of 10 is selling at twice its equity. This adjustment lowered kmi s economic book value from 1 6 billion to 8 6 billion.

Criteria for a non controlling interest. Kinder morgan kmi which had a total of 10 billion in minority interest liability removed from shareholder value in 2012. As an example if company m has 80 stake in company x then the remaining 20 is the non controlling interest in company x.

This means if the company dissolves the shareholders will receive an amount per share as per book value per share. Book value would not change. International accounting standard 27 ias 27 defines non controlling interest as the equity in a subsidiary not attributable directly or indirectly to a parent.

However sometimes the threshold is lower as a shareholder may hold only 49 of a company but is able to exercise a greater level of influence. Let s say the fair value of non controlling. This is the value at which you can reasonable expect to sell your holding in the market.

A non controlling interest minority interest occurs when an ownership stake is less than 50 of the outstanding shares. Book value per common share or simply book value per share bvps is a method to calculate the per share book value of a company based on common shareholders equity in the company. The book value per share may be used by some investors to determine the equity in a company relative to the market value of the company which is the price of its stock.

3 1 1 noncontrolling interest in a subsidiary owned by the parent or affiliate of a. 2 15 hypothetical liquidation at book value 9. Calculate fair value of the non controlling interest fair value of the equity.