What does treasury stock mean on the CPA exam?
Treasury stock. A company's own shares reacquired and not retired. A contra-equity deduction, never an asset, and no gain or loss reaches income on the purchase or the resale: the difference lands in additional paid-in capital or retained earnings.
Defined against ASC 505-30-45-1, 30-10.
Which CPA exam sections use treasury stock?
Treasury stock appears in the FAR section of the CPA exam.
Other terms defined against ASC 505-30
- additional paid-in capital: Amounts received from shareholders above the par or stated value of the shares issued, reported as a separate equity caption.
Related terms
- retained earnings: Cumulative profit the entity has kept rather than paid out as dividends.
- earnings and profits: A corporation's cumulative economic capacity to pay a distribution out of earnings rather than out of capital.
- effective portion: The part of a cash flow hedge's gain or loss that actually offsets the hedged risk.
- net capital gain: Net long-term capital gain minus net short-term capital loss.
- capital loss: Loss on the sale of a capital asset.
- change in accounting principle: A switch from one acceptable principle to another, allowed only when a new standard requires it or the new principle is preferable.