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What are the two ways to classify treasury stock?

After a company buys back common stock that was previously issued and outstanding, it is classified as treasury stock. Treasury stock can either be permanently retired or can be held-for-sale.

Once the shares are retired, they cannot be subsequent reissued, and they are removed from the company’s balance sheet. Most companies choose to classify treasury stock as held-for-resale because it can be reissued to the general public to raise funds, it can be issued as a stock dividend to investors, or it can be used to compensate employees.

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