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The income statement is one of the four financial statements required by the generally accepted accounting principles, along with the balance sheet, cash flow statement and statement of shareholder's equity. The income statement calculates the accounting income of a company in a specific time period. However, the accounting income of a company is not cash income and may be a totally different figure than cash. Look at the cash flow statement to see if the cash inflows match up with the accounting income.
Net Income Attributable to Shareholders
Net income attributable to shareholders is one more step down from net income on the income statement. The net income of a company equals all of the revenues minus all of the expenses, including interest expenses and taxes. Net income attributable to shareholders is the net income minus the non-controlling interests, sometimes
called minority interests.
Non-controlling interests occur when there is a parent company and another partner or partners that own a subsidiary. After the net income is calculated, the income is divided between the parent company and the partners. After non-controlling interests are subtracted out, the income that is left is directly for the shareholders of the parent company. The non-controlling interests in this case are reported from the perspective of the parent. The shareholders own the parent company.
How It's Used
Net income attributable to shareholders is used in the same way that net income is used to value a company. Often, a company is valued in the terms of earnings. By excluding the minority interests, an analyst is able to better understand what income shareholders have a claim on. If the minority interests were included, the net income figure would be overstated.