What is Treasury stock? How do you record Treasury stock in financial statements?
Treasury stocks or Treasury shares are the entity’s own share capital that has been issued and then reacquired but not canceled. From this definition, three requisites must be present in order that a share should qualify as treasury share: a. The share must be the entity’s own share. b. The share must have been issued originally. c. The share is reacquired but not cancelled. Treasury share in Financial Statements (Disclosure): The disclosure relating to treasury shares shall include the following: a. The number of shares held in the treasury. b. The restriction on the availability of retained earnings for distribution of dividends.
