# ASC 505-30-05: Equity — Treasury Stock — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/505/30/#05-overview-and-background)

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## ASC 505-30-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/505/30/#05-overview-and-background)

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##### [505-30-05-1](https://asc.understandingaccounting.org/asc/505/30/#505-30-05-1)

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This Subtopic addresses the accounting and reporting for an entity's repurchase of its own outstanding common stock as well as the subsequent constructive or actual retirement of those shares.

##### [505-30-05-2](https://asc.understandingaccounting.org/asc/505/30/#505-30-05-2)

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Entities may repurchase their own outstanding common stock for a variety of different purposes. Repurchased common stock is often referred to as treasury stock or treasury shares.

##### [505-30-05-3](https://asc.understandingaccounting.org/asc/505/30/#505-30-05-3)

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When entities repurchase their own common stock, laws applicable to those entities may affect the treatment and accounting for repurchased shares of stock. Entities sometimes pay more or less for the repurchased shares than either their [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") or their original issue price.