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Share retirement belongs in a dated, class-level equity analysis. Share retirement formally cancels reacquired shares. It reduces both issued and outstanding shares and removes the original par or stated capital and related contributed amounts supported by the issue records.
Apply it
If an entity retires 10,000 $1-par shares originally issued for $9, it removes $10,000 of common stock and $80,000 of original APIC. The difference between those amounts and repurchase cost follows the applicable capital route.
Review share retirement against treasury stock. Reconcile share retirement to issued shares, the dated share retirement evidence, and its final presentation.
The share retirement record ties treasury stock to its source date, measured amount, and issued shares effect.
Keep the boundary clear
A treasury purchase alone does not prove retirement. The workpaper needs the board action, legal record, share class, lot history, and original-issue evidence.
Authority
Read ASC 505-30-30-7 for measurement when reacquired shares are retired.
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- Treasury stock — Apply
To apply this concept: Required. This prior idea supplies the quantities or classification needed for the current analysis.