Treasury Stock

What treasury stock covers

Treasury stock is a company's own shares that it has reacquired but not cancelled. It is not an asset — a company cannot own part of itself — so it is presented as a deduction from equity. No gain or loss goes through profit on treasury transactions; any difference on reissue is taken to equity.

Challenges here cover acquisition, reissue above and below cost, and presentation within equity.

Where marks are usually lost

• Showing treasury stock as an asset.
• Reporting a gain in profit when treasury shares are reissued above cost.
• Recognising dividend income on shares held in treasury.