Acquisition of a Controlling Interest but Not 100 Percent of an Entity 1.

13 Paragraph 9 of Statement 141

indicates that for an acquisition of equity interests to be a business combination, the entity acquiring the
equity interests must obtain control. Control is generally indicated by ownership by one company,
directly or indirectly, of over 50 percent of the outstanding voting shares of another company (see 1.00).
Accordingly, a business combination may occur when a portion of the equity interest of the acquired
entity remains as a noncontrolling interest (often referred to as minority interest). In such a transaction,
the acquiring entity will recognize in its consolidated financial statements the net assets acquired
through the combination of fair value — to the extent acquired — and the historical cost for the
minority interest

Acquisition of a Noncontrolling Interest of a Subsidiary 1.14 Although paragraph 11 of Statement 141

provides that “[t]he acquisition of some or all of the noncontrolling interests in a subsidiary is not a
business combination,” paragraph 14 of Statement 141 indicates that “[t]he acquisition of some or all of
the noncontrolling interests in a subsidiary — whether acquired by the parent, the subsidiary itself, or
another affiliate — shall be accounted for using the purchase method.” Paragraph A6 of Statement 141
indicates: