Last Updated on 12/27/2017 by GS Staff
[otw_shortcode_dropcap label=”Q:” size=”large” border_color_class=”otw-no-border-color”][/otw_shortcode_dropcap] Is treasury stock an asset?
[otw_shortcode_dropcap label=”A:” size=”large” border_color_class=”otw-no-border-color”][/otw_shortcode_dropcap] Treasury stock is stock that has been reacquired or repurchased by a company of their own shares. When stock is reacquired and placed into treasury stock, it is not considered retired. It can be reissued at a future time if the company chooses. A company does have the option to retire shares after they have been reacquired without placing them into treasury stock.
Is treasury stock an asset? No, treasury stock is not a current asset, noncurrent asset, or any other type of asset. It does not appear on the balance sheet as an asset despite the company having the ability to reissue the treasury stock for business funds in the future. Treasury stock appears on the balance sheet under the stockholder’s equity section.
When stock is repurchased and converted into treasury stock, a company will complete the below debit and credit entry. Note that when there is a purchase of treasury stock, this represents a decrease to assets and stockholder’s equity.