issued shares that have been reacquired by the company. Treasury shares may be resold or cancelled. Dividends are not paid on treasury shares nor are voting fights associated with them. The two acceptable methods of accounting for treasury stock are the cost method and par value method. Under the cost method, treasury stock is shown at thecost to reacquire the shares. Under the par value method, treasury stock is recorded at the par value of the reacquired stock. Treasury stock is shown as a deduction in arriving at stockholders' equity. Under either method, there is an appropriation of retained earnings equal to the cost of the treasury stock held.

issued shares that have been reacquired by the company. Treasury shares may be resold or cancelled. Dividends are not paid on treasury shares nor are voting fights associated with them. The two acceptable methods of accounting for treasury stock are the cost method and par value method. Under the cost method, treasury stock is shown at thecost to reacquire the shares. Under the par value method, treasury stock is recorded at the par value of the reacquired stock. Treasury stock is shown as a deduction in arriving at stockholders' equity. Under either method, there is an appropriation of retained earnings equal to the cost of the treasury stock held.