Accounting Study Guide

U.S. GAAP
Financial Reporting Guide

Section 5530: Treasury Stock

[U.S. GAAP Codification Topic]
505-30 Treasury stocks

1. Treasury Stock
Entity's own outstanding shares
--> repurchased by the entity

2. 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"

3. 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"