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Outstanding shares belongs in a dated, class-level equity analysis. Outstanding shares are issued shares held by owners outside the issuing entity. Reconcile them as issued shares less treasury shares for each class and date. The ending quantity supports rights at period-end, but EPS needs dated intervals throughout the period.
Apply it
If 1,000,000 shares are issued and 40,000 are held in treasury, 960,000 are outstanding. A later reissue of 10,000 treasury shares raises outstanding shares to 970,000 without changing issued shares.
Review outstanding shares against issued shares. Reconcile outstanding shares to treasury stock, the dated outstanding shares evidence, and its final presentation.
The outstanding shares record ties issued shares to its source date, measured amount, and treasury stock effect.
Keep the boundary clear
Outstanding shares are not the same as authorized shares, potential common shares, or the weighted-average EPS denominator. Each answers a different question.
Authority
Read ASC 505-30-05-1 for repurchases of outstanding common stock.
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- Issued shares — Apply
To apply this concept: Required. This prior idea supplies the quantities or classification needed for the current analysis.
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- Cash dividend — Apply
Required level here: apply. Required. This prior idea supplies the quantities or classification needed for the current analysis.
- Stock dividend — Apply
Required level here: apply. Required. This prior idea supplies the quantities or classification needed for the current analysis.
- Stock split — Apply
Required level here: apply. Required. This prior idea supplies the quantities or classification needed for the current analysis.
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- Treasury stock — Apply
Required level here: apply. Required. This prior idea supplies the quantities or classification needed for the current analysis.
- Weighted-average common shares — Apply
Required level here: apply. Required. This earlier step supplies an input required by the EPS workpaper.