NonControlInt comes up as zero for some companies where it should not. For example, NSU last quarter non-controlling interest was 127,573 but NonControlInt(0,QTR) returns 0.
Where do you get that figure? I see 0 in the database.
Still investigating. We might have mapped to the wrong line item. Can you tell me the source of your figure ? Thanks
We repaired the mapping. Note, though, that Compustat’s #s don;t exactly match the number you supply, but they do match what we see in the SEC filings.
Wow, thanks for such a quick reply!
The number I saw was from the financials released for the quarter ended March 31, 2012.
http://sec.gov/Archives/edgar/data/919991/000147237512000082/exhibit99-2.htm
Under the balance sheet for “Non-controlling interest” - 127,573. Maybe Compustat is netting that out with a non-controlling interest on the asset side, which this company seems to have.
Whether that is the right figure to use or not, I really appreciate the quick response.
Actually, on further review, we’re going to refine our handling of minority interest (or as many, including Compustat, refer to it, Non Controlling interest).
This area got a bit confusing after a 2008 accounting-rule change. The old way, what your initial post had assumed, was that minority interest was a “mezzanine” item, standing in between liabilities and equity. Under the new rule, that is so only if the minority interest is redeemable; i.e. if we can presume that someday, the company will have to use funds to buy out or eliminate the minority interest.
But now (and since 2008), if the minority interest is non-redeemable; i.e. permanent, it has to be presented separately in the equity portion. This is not a universally popular rule in that it allowed many companies to instantly pump up their equity ratios by adding in amounts that really aren’t owned by the company. (Companies in trouble with leverage ratios, however, loved the new rule.)
Compustat, consistent with the analytical forte that we appreciate, conforms to FASB 160 but makes it easy for users to avoid getting swept up by this new type of highly-debatable “equity”. It presents Noncontrolling interest - Non-redeemable (nul before 2008) as being below “Shareholder Equity.” It adds this filed to Shareholder Equity to get a field it calls Total Equity.
We’re going to add the Non controlling interest Non Redeemable item. But like compustat, all ratios that use equity will continue to work with Common Equity (i.e. book value) or Shareholder equity. To avoid user confusion, we’re going to continue to omit the “nouvelle” Total Equity field; users who want it can create it as a custom formula, but we do caution to be careful how you’d use it - it should not count in leverage or return on capital ratios.
The number for NSU that you reported but didn’t see will show in the new non-redeemable field.
I appreciate all the response to this issue, but just noting that NonControlInt for Nevsun still comes up as zero…
Is minority interest, or Non-Controlling Interest, for the Income Statement available in the system?
Not directly. You can kind of back into it with some flavors of net income:
NetIncBXor(0,TTM)-NetIncBXorNonC(0,TTM)
That will return the sum of “extraordinary items” and earnings from non-controlled companies. The problem, of course, is that it includes extraordinary items.
In practice, in our experience, extraordinary items are pretty much passe. If the WTC attacks weren’t extraordinary, the bar might be set a tad high, and if you go back and look you’ll find that not many companies reported extraordinary expenses for that. We do, however, see some extraordinary items in the database. CompuStat seems to place discontinued operations in that category most commonly.
In practice, therefore, any stream of the above equation that’s consistently positive is likely to be income from minority interest.
All of that said, I’d say that the entire point of segregating non-consolidated income is to remove it from the stuff that matters. It’s essentially large-scale dividend income, and so has nothing to do, analytically, with a company’s “real” ongoing operations. There are very good reasons that it’s usually ignored.
Hi all, was there ever any advancement in including a factor for income from minority interest?
Yes, it's now called non-controlling interest (NonControlInt). See https://www.portfolio123.com/doc/doc_detail.jsp?factor=NonControlInt
Thank you Yuval- much appreciated.