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Treasury stock belongs in a dated, class-level equity analysis. Treasury stock represents the issuer's own shares that it reacquired and has not retired. Under the cost method, the purchase is a contra-equity amount. The share register reduces outstanding shares while issued shares remain unchanged.
Apply it
Buying 20,000 shares for $15 each records $300,000 of treasury stock. Reissuing 5,000 shares later changes treasury stock and the related paid-in-capital accounts; it does not create sales revenue.
Review treasury stock against issued shares. Reconcile treasury stock to outstanding shares, the dated treasury stock evidence, and its final presentation.
The treasury stock record ties issued shares to its source date, measured amount, and outstanding shares effect.
Keep the boundary clear
The issuer's own shares are not an investment asset. Differences on treasury-share transactions stay within equity under the applicable method rather than becoming gains or losses in earnings.
Authority
Read ASC 505-30-45-1 for presentation of treasury stock as a deduction from equity.
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- Explain and apply treasury stock within a reconciled class-level equity workpaper using supplied authoritative facts.
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- Outstanding shares — Apply
To apply this concept: Required. This prior idea supplies the quantities or classification needed for the current analysis.
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- Share retirement — Apply
Required level here: apply. Required. This prior idea supplies the quantities or classification needed for the current analysis.