Identify the true statements regarding noncontrolling interest. more than one answer may be correct.

A non-controlling interest, also known as a minority interest, is an ownership position wherein a shareholder owns less than 50% of outstanding shares and has no control over decisions. Non-controlling interests are measured at the net asset value of entities and do not account for potential voting rights.

Most shareholders of public companies today would be classified as holding a non-controlling interest, with even a 5% to 10% equity stake considered to be a large holding in a single company. A non-controlling interest may be contrasted with a controlling, or majority interest in a company, where the investor does have voting rights and can often affect the course of the company.

• A non-controlling interest, also known as a minority interest, is an ownership position whereby a shareholder owns less than 50% of outstanding shares.
• As a result, minority interest shareholders have no individual control over corporate decisions or votes by themselves.
• A direct non-controlling interest receives a proportionate allocation of all (pre- and post-acquisition amounts) recorded equity of a subsidiary.
• An indirect non-controlling interest receives a proportionate allocation of a subsidiary's post-acquisition amounts only.
• The opposite of a non-controlling interest is a controlling interest, where a shareholder has voting rights to determine a corporate decision.

Most shareholders are granted a set of rights when they purchase common stock, including the right to a cash dividend if the company has sufficient earnings and declares a dividend. Shareholders may also have the right to vote on major corporate decisions, such as a merger or company sale. A corporation can issue different classes of stock, each with different shareholder rights.

Generally, there are two types of non-controlling interests: a direct non-controlling interest and an indirect non-controlling interest. A direct non-controlling interest receives a proportionate allocation of all (pre and post-acquisition amounts) recorded equity of a subsidiary. An indirect non-controlling interest receives a proportionate allocation of a subsidiary's post-acquisition amounts only. 

It is generally not until an investor controls 5% to 10% of the shares that they communicate specific proposals to the board and management, propose changes to the board of directors, propose changes at a shareholder meeting and team with other investors to make their actions more likely to succeed. Such investors are termed Activist investors. Activist investors range widely in style of action and objectives. Objectives range from seeking operational improvements to restructuring to natural environment and social policy.

Consolidation is a set of financial statements that combine the accounting records of several entities into one set of financials. These typically include a parent company, as the majority owner, a subsidiary, or a purchased firm, and a non-controlling interest company. The consolidated financials allows investors, creditors, and company managers to view the three separate entities as if all three firms are one company.

A consolidation also assumes that a parent and a non-controlling interest company jointly purchased the equity of a subsidiary company. Any transactions between the parent and the subsidiary company, or between the parent and the non-controlling interest firm, are eliminated before the consolidated financial statements are created.

Assume that a parent company buys 80% of XYZ firm and that a non-controlling interest company buys the remaining 20% of the new subsidiary, XYZ. The subsidiary’s assets and liabilities on the balance sheet are adjusted to fair market value, and those values are used on the consolidated financial statements. If the parent and a non-controlling interest pay more than the fair value of the net assets, the excess is posted to a goodwill account in the consolidated financial statements.

Goodwill is an additional expense incurred to buy a company for more than the fair market value, and goodwill is amortized into an expense account over time after an impairment test. This is done under the purchase acquisition accounting method approved by the Financial Accounting Standards Board (FASB).