Module V· Non-Controlling Interest (NCI) in M&AAdvanced
Question
What is a squeeze-out, and how is it treated in accounting?
Answer
A squeeze-out is the compulsory acquisition of remaining minority shareholders once the controlling shareholder reaches the legal threshold. If the parent already controls the subsidiary, buying out NCI is treated as an equity transaction: NCI is reduced, cash / consideration is paid, and the difference goes to parent equity. No new goodwill or P&L gain/loss is recognized after control already exists.