Treasury stock: Are you accounting for It correctly?

Our analysis of Matters for Further Consideration (MFCs) for the 2017 and 2018 years indicate that many practitioners are unaware of the impact of state law on the presentation of treasury stock. In fact, we noted over 100 MFCs which pertained to improper presentation of treasury stock. Generally, the guidance on accounting for treasury stock is found in FASB Accounting Standards Codification (FASB ASC) 505, Equity. Once shares are reacquired, they may either be retired or held in treasury for reissue. If not retired, such shares are referred to as treasury shares or treasury stock.