It could be 0 but you can't have a negative amount on your balance sheet.
Under Acquisition Method, assets, liabilities, revenues and expenses are combined. Equity of the sub is ignored. So if if the Parent owns 80% of a subsidiary, Parent's balance sheet's post-acqusition would be:
Assets = Original Parent Assets + 80% x Sub Assets
Liabilities = Original Parent Liability + 80% x Sub Liabilities
Equity = Original Parent Equity + Minority Interest
MI = 20% x Sub's Original Equity
To get a better sense, look at any of your examples of Acqusition Method. The net change in the Parents Assets - Parents Liabilities MUST equal Minority Interest (since parent's original equity remains same)
If parent has 500 equity, then aquired 80% of a company with 400 equity, how are these reported under consolidation? Which of the following interpretation is correct?
The way I understand it is like this,
Parent book value of equity = 800
Purchases 80% of company b by issuing new shares equalling 300.
Now, if there is no goodwill, ie fair value of company equals fair value of net assets, your minority interest is the same under both us gaap and ifrs. It's calculation would be 20% of the company bs fair value of net assets, which is in this case going to be 375 (300/.80).
You minority interest would be .2*375= 75.
thanks. so you are effectively reporting the total value of the subsidiary, just that it's seperated into your proportional share and minority interest.