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Unformatted text preview: There is no essential difference between the following: [ARB 43, paragraph Ch. 1B Par. 7, sequence 118.2.1] ] a. [The repurchase and retirement of a corporation's own common stock and the subsequent issue of common shares [ARB 43, paragraph Ch. 1B Par. 7, sequence 220.127.116.11] ] b. [The repurchase and resale of its own common stock. [ARB 43, paragraph Ch. 1B Par. 7, sequence 18.104.22.168] ] 505-30-25-8 [Even though there may be cases where the transactions involved are so inconsequential as to be immaterial, as a broad general principle, such transactions shall not be reflected in retained earnings (either directly or through inclusion in the income statement). [ARB 43, paragraph Ch. 1B Par. 10, sequence 126] ][ The qualification shall not be applied to any transaction that, although in itself inconsiderable in amount, is a part of a series of transactions that in the aggregate are of substantial importance. [ARB 43, paragraph Ch. 1B Par. 11, sequence 127] ] 505-30-25-9 [The difference between the repurchase and resale prices of a corporation's own common stock shall be reflected as part of the capital of a corporation and allocated to the different components within stockholder equity as required by paragraphs 505-30-30-5 through 30-10. [ARB 43, paragraph Ch. 1B Par. 5, sequence 116] ] Allocating the Cost of Treasury Shares to Components of Shareholder Equity Upon Formal or Constructive Retirement 505-30-30-6 [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 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. [ARB 43, paragraph Ch. 1B Par. 7, sequence 122.1] ] 505-30-30-7 [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. [ARB 43, paragraph Ch. 1B Par. 7, sequence 118.1] ] 505-30-30-8 [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), [ARB 43, paragraph Ch. 1B Par. 7, sequence 119] ][ an excess of repurchase price over par or stated value may be allocated between additional paid-in capital and retained earnings. [ARB 43, paragraph Ch. 1B Par. 7, sequence 120.1.1] ][ 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. [ARB 43, paragraph Ch. 1B Par. 7, sequence 22.214.171.124.2] ][ If a portion of the excess is allocated to additional 43, paragraph Ch....
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- Spring '13
- Accounting, International Financial Reporting Standards, legal entity, Financial Accounting Standards Board, VIE