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This Example illustrates the guidance in paragraph 505-30-25-5 by identifying the two separate transactions, namely a treasury stock purchase and a forward contract, that are present in what is sometimes described as an accelerated share repurchase program.
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The treasury stock purchase is as follows.
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Investment Banker, an unrelated third party, borrows 1,000,000 shares of Company A common stock from investors, becomes the owner of record of those shares, and sells the shares short to Company A on July 1, 1999, at the fair value of $50 per share. Company A pays $50,000,000 in cash to Investment Banker on July 1, 1999, to settle the purchase transaction. The shares are held in treasury. Company A has legal title to the shares, and no other party has the right to vote those shares.
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The forward contract is as follows.
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Company A simultaneously enters into a forward contract with Investment Banker on 1,000,000 shares of its own common stock. On the October 1, 1999, settlement date, if the volume-weighted average daily market price of Company A's common stock during the contract period (July 1, 1999, to October 1, 1999) exceeds the $50 initial purchase price (net of a commission fee to Investment Banker), Company A will deliver to Investment Banker cash or shares of common stock (at Company A's option) equal to the price difference multiplied by 1,000,000. If the volume-weighted average daily market price of Company A's common stock during the contract period is less than the $50 initial purchase price (net of a commission fee to Investment Banker), Investment Banker will deliver to Company A cash equal to the price difference multiplied by 1,000,000.
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Under the guidance in paragraph 505-30-25-5,an entity would account for this accelerated share repurchase program as two separate transactions:
  1. a
    As shares of common stock acquired in a treasury stock transaction recorded on the July 1, 1999, acquisition date
  2. b
    As a forward contract indexed to its own common stock.
","snippet":"Under the guidance in paragraph 505-30-25-5,an entity would account for this accelerated share repurchase program as two separate transactions:\n(a) As shares of common stock acquired in a treasury stock transaction recor…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7eb70e8af219b1710d252a04e4153c40cbff45a769f1f49eb1658167224bec09","downloaded_from":"2026-09-10T00:38:24.712Z","last_downloaded_at":"2026-09-10T00:38:24.712Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481491","source_sha256":"3d464289aa3023e52e164c196b57f2662d39ab9458d5787cd6d53de1a18da75f"}},{"citation":"505-30-55-7","para":"55-7","html":"
See Example 13 (paragraph 260-10-55-88) for the effect on earnings per share (EPS) for this Example.
","snippet":"See Example 13 (paragraph 260-10-55-88) for the effect on earnings per share (EPS) for this Example.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8f097564f70a1ecdf4af8131e46002e4caf47d99cef8ff87050bdaa519cd3340","downloaded_from":"2026-09-10T00:38:24.712Z","last_downloaded_at":"2026-09-10T00:38:24.712Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481491","source_sha256":"3d464289aa3023e52e164c196b57f2662d39ab9458d5787cd6d53de1a18da75f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:edf90446a262cfda5dfb8536f7cc95ac8b88820a99484038f62f5989c969dbba","downloaded_from":"2026-09-10T00:38:24.712Z","last_downloaded_at":"2026-09-10T00:38:24.712Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481491","source_sha256":"3d464289aa3023e52e164c196b57f2662d39ab9458d5787cd6d53de1a18da75f"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1e4fba3faf0664396188c7b1ce1007918489887ba2047f6de9a1047b1a2195fd","downloaded_from":"2026-09-10T00:38:24.712Z","last_downloaded_at":"2026-09-10T00:38:24.712Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481491","source_sha256":"3d464289aa3023e52e164c196b57f2662d39ab9458d5787cd6d53de1a18da75f"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1e4fba3faf0664396188c7b1ce1007918489887ba2047f6de9a1047b1a2195fd","downloaded_from":"2026-09-10T00:38:24.712Z","last_downloaded_at":"2026-09-10T00:38:24.712Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481491","source_sha256":"3d464289aa3023e52e164c196b57f2662d39ab9458d5787cd6d53de1a18da75f"}}