Purchase of a non-controlling interest

To record the purchase of a non-controlling interest (also known as a minority interest) in a subsidiary or affiliated entity in QuickBooks, you would typically create a journal entry to account for the transaction. Here’s how to do it:

Step 1: Create a Journal Entry for the Non-Controlling Interest Purchase:

1. Go to the QuickBooks homepage.
2. Click on the “Create” button (usually represented by a plus “+” sign) at the top of the screen.
3. Under the “Other” column, select “Journal Entry.”

Step 2: Enter the Non-Controlling Interest Purchase Details:

In the journal entry:

• Debit the equity account that represents the non-controlling interest. This account should be specific to the non-controlling interest in your chart of accounts. Enter this as a positive value.
• Credit the bank or payment account you used to make the payment for the non-controlling interest. Enter this as a negative value.
• Add a memo or description to explain the nature of the entry, including details about the non-controlling interest purchase, the percentage acquired, the value, and the date of the transaction.

Step 3: Review and Save the Journal Entry:

Review the journal entry details to ensure accuracy and save the journal entry.

Step 4: Document the Transaction:

Maintain proper documentation related to the non-controlling interest purchase, including the purchase agreement, certificates, and any other relevant paperwork.

Step 5: Reconcile Your Accounts:

After recording the non-controlling interest purchase, reconcile your accounts in QuickBooks with your actual financial statements to ensure accuracy.

Step 6: Consult with Your Accountant:

Purchasing a non-controlling interest can have accounting and tax implications, and it’s advisable to consult with your accountant or financial advisor to ensure that you’re correctly accounting for the transaction and addressing any specific tax or compliance requirements.

Please note that the specific accounting treatment of a non-controlling interest purchase may vary based on accounting standards, the structure of the transaction, and other factors. Consulting with a professional accountant is essential to ensure compliance with accounting regulations and accurate accounting for the non-controlling interest purchase.

Small business owners often rely on a bookkeeper for small business to handle day-to-day financial tasks.