Treasury Stock, ASC 505

Treasury Stock
Entity’s own outstanding shares
–> repurchased by the entity

Presentation of treasury stock
Cost of treasury stock is not reported as an asset
Cost of treasury stock is reported as a deduction from “equity”

Gain or loss on sale of treasury stock
1. Gain is credited to “additional paid-in capital”

2. Loss is first charged to “previous gain” from sale of treasury stock of same class
–> The remaining loss is charged to “retained earnings”

 

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