Treasury shares

Treasury shares are a company's own repurchased shares that have not been cancelled; they are deducted from equity at cost, carry no voting rights while held, and any gain on reissuance increases share premium.

ByHoang TruongUpdated July 3, 2026

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A company with 10,000,000 shares issued that buys back 500,000 and holds them in treasury reports only 9,500,000 net shares in issue. Treasury shares carry no votes or dividends and are deducted from equity at cost, so the buyback mechanically raises earnings per share even if profit is unchanged.

Where it fits

SubjectFinancial AccountingAdvancedTopicThe Accounting Equation & Its ElementsAdvanced

The formula

LaTeX

n_{\text{net}} = n_{\text{issued}} - n_{\text{treasury}}

Variables

$n_{n} e t$: Shares in issue available to outside shareholders, used in EPS calculations (shares)
$n_{i} ss u e d$: Total shares formally issued by the company (shares)
$n_{t} r e a s u r y$: Shares repurchased and held in treasury (shares)

Treasury shares are deducted from equity at cost, not recorded as an asset. Reducing the share count mechanically increases EPS even if underlying earnings are unchanged.

Check yourself

PracticeCORE

Auriga Ltd repurchases 200,000 of its own ordinary shares at €3.50 per share for a total cost of €700,000. How should this transaction be recorded?

Select an answer to check your understanding.