Gain or loss is recognized on the purchase, sale, issue or cancellation of treasury shares.

Name: Gain or loss is recognized on the purchase, sale, issue or cancellation of treasury shares.
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Question

Quizplus · Accepted Answer

Treasury shares transactions are accounted for using the cost method or the constructive retirement method, and they affect the equity section of the balance sheet. Gains or losses are not recognized in income statement for these transactions; instead, they are directly adjusted against shareholders' equity.

Gain or Loss Is Recognized on the Purchase, Sale, Issue