# ASC 505-30-30: Equity — Treasury Stock — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/505/30/#30-initial-measurement) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:d1ef64e5993db5ed48297726beea9355800a9556926592a85a7912f15e7af858 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 505-30-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/505/30/#30-initial-measurement) SEC content: no ##### [505-30-30-1](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:918843186a373d774d95f8d06373ebecaff6071b9f5c46b5457ca4a91d49eaa9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section provides guidance on measuring amounts that arise from repurchases of an entity's own outstanding common stock. The measurement issues addressed include both of the following: 1. a Determining the allocation of amounts paid to the repurchased shares and other elements of the repurchase transaction 2. b Further allocation of amounts allocated to repurchased shares to various components of stockholder equity upon formal or constructive retirement. #### Allocating Repurchase Price to Other Elements of the Repurchase Transaction ##### [505-30-30-2](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:4fc51a91fd1e6c09b6afe32d486c1063f428687d926dea3a86cd72fbf8045cab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An allocation of repurchase price to other elements of the repurchase transaction may be required if an entity purchases treasury shares at a stated price significantly in excess of the current market price of the shares. An agreement to repurchase shares from a shareholder may also involve the receipt or payment of consideration in exchange for stated or unstated rights or privileges that shall be identified to properly allocate the repurchase price. ##### [505-30-30-3](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:23c671ae63bb5b3e28ae7a25cc1e789a43821cad98618f9137360f54f6b654ba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, the selling shareholder may agree to abandon certain acquisition plans, forego other planned transactions, settle litigation, settle employment contracts, or restrict voluntarily the ability to purchase shares of the entity or its affiliates within a stated time period. If the purchase of treasury shares includes the receipt of stated or unstated rights, privileges, or agreements in addition to the capital stock, only the amount representing the [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.") of the treasury shares at the date the major terms of the agreement to purchase the shares are reached shall be accounted for as the cost of the shares acquired. The price paid in excess of the amount accounted for as the cost of treasury shares shall be attributed to the other elements of the transaction and accounted for according to their substance. If the fair value of those other elements of the transaction is more clearly evident, for example, because an entity's shares are not publicly traded, that amount shall be assigned to those elements and the difference recorded as the cost of treasury shares. If no stated or unstated consideration in addition to the capital stock can be identified, the entire purchase price shall be accounted for as the cost of treasury shares. ##### [505-30-30-4](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:cc71ffceb3da7f774ba19a5f7bc904a0e9db179cfd6eeef7f640dff28ad3e53d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transactions do arise, however, in which a reacquisition of an entity's stock may take place at prices different from routine transactions in the open market. For example, to obtain the desired number of shares in a tender offer to all or most shareholders, the offer may need to be at a price in excess of the current market price. In addition, a block of shares representing a controlling interest will generally trade at a price in excess of market, and a large block of shares may trade at a price above or below the current market price depending on whether the buyer or seller initiates the transaction. An entity's reacquisition of its shares in those circumstances is solely a treasury stock transaction properly accounted for at the purchase price of the treasury shares. Therefore, in the absence of the receipt of stated or unstated consideration in addition to the capital stock, the entire purchase price shall be accounted for as the cost of treasury shares. #### Allocating the Cost of Treasury Shares to Components of Shareholder Equity Upon Formal or Constructive Retirement ##### [505-30-30-5](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:5fc54447b3f77716224a9ceb5e47791c9466d2d9625cded5cdab822676afa0be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that repurchases its own outstanding common stock may be required under paragraph [505-30-30-3](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-3) to allocate a portion of the repurchase price to other elements of the transaction. ##### [505-30-30-6](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:7e01f7c55bb1d555df626f9537807664964ae27a71b084deeab497853ab583ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once the cost of the treasury shares is determined under the requirements of this Section, and if a corporation's stock is acquired for purposes other than retirement (formal or constructive), or if ultimate disposition has not yet been decided, paragraph [505-30-45-1](https://asc.understandingaccounting.org/asc/505/30/#505-30-45-1) permits the cost of acquired stock to either be shown separately as a deduction from the total of capital stock, additional paid-in capital, and retained earnings, or be accorded the following accounting treatment appropriate for retired stock. ##### [505-30-30-7](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:4a66d4aa08333102282f0598890a3db2bd1c2a1dfa353d1ebb803e979bfe90d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The difference between the cost of the treasury shares and the stated value of a corporation's common stock repurchased and retired, or repurchased for constructive retirement, shall be reflected in capital. ##### [505-30-30-8](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-8) Pending content: yes Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:09429a91adff7bb3f67f07048a2ca9e1ac808d0fe6bccced61cdfb45a48f5c2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a corporation's stock is retired, or repurchased for constructive retirement (with or without an intention to retire the stock formally in accordance with applicable laws), _an excess of repurchase price over par or stated value_ may be allocated between additional paid-in capital and retained earnings. Alternatively, the excess may be charged entirely to retained earnings in recognition of the fact that a corporation can always capitalize or allocate retained earnings for such purposes. If a portion of the excess is allocated to additional paid-in capital, it shall be limited to the sum of both of the following: 1. a All additional paid-in capital arising from previous retirements and net gains on sales of treasury stock of the same issue 2. b The pro rata portion of additional paid-in capital, voluntary transfers of retained earnings, capitalization of stock dividends, and so forth, on the same issue. For this purpose, any remaining additional paid-in capital applicable to issues fully retired (formal or constructive) is deemed to be applicable pro rata to shares of common stock. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [105-10-65-10](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-10)When a corporation's stock is retired, or repurchased for constructive retirement (with or without an intention to retire the stock formally in accordance with applicable laws), _an excess of repurchase price over par or stated value_ may be: 1. a Allocated between additional paid-in capital and retained earnings. If a portion of the excess is allocated to additional paid-in capital, it shall be limited to the sum of both of the following: 1. 1 All additional paid-in capital arising from previous retirements and net gains on sales of treasury stock of the same issue 2. 2 The pro rata portion of additional paid-in capital, voluntary transfers of retained earnings, capitalization of stock dividends, and so forth, on the same issue. For this purpose, any remaining additional paid-in capital applicable to issues fully retired (formal or constructive) is deemed to be applicable pro rata to shares of common stock. 2. b Reflected entirely to retained earnings in recognition of the fact that a corporation can always capitalize or allocate retained earnings for such purposes. 3. c Reflected entirely as a deduction from additional paid-in capital as long as additional paid-in capital does not become negative. ##### [505-30-30-9](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:d89fc5475c4633bdc5d96666388c2459f7c62cdc6d4172bab15c27cff2822408 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a corporation's stock is retired, or repurchased for constructive retirement (with or without an intention to retire the stock formally in accordance with applicable laws), _an excess of par or stated value over the cost of treasury shares_ shall be credited to additional paid-in capital. ##### [505-30-30-10](https://asc.understandingaccounting.org/asc/505/30/#505-30-30-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:38:15.295Z to 2026-09-10T00:38:15.295Z Record version: sha256:a852e106c97bbd3f166d3c73e834556fd8fc0e6fdc06a5ee1aa504a273f1e13c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Gains on sales of treasury stock not previously accounted for as constructively retired shall be credited to additional paid-in capital; losses may be charged to additional paid-in capital to the extent that previous net gains from sales or retirements of the same class of stock are included therein, otherwise to retained earnings.