Balancing Minority Equityholder Rights and Acquirer’s Ability to Consolidate Under U.S. GAAP Financial Accounting Rules

There is a presumption that consolidated financial statements are usually necessary for a fair presentation when one of the entities in the consolidated group directly or indirectly has a controlling financial interest in the other entities. In a Minority Interest Acquisition, it can be difficult to ascertain whether the acquirer has obtained a controlling financial interest for purposes of the financial accounting rules.

This article addresses financial statement consolidation rules and potential solutions to balance minority equity holder rights and protections and an acquirer’s ability to consolidate under the financial statement consolidation rules.