IAS 32Chapter 5Lesson 1
Treasury shares and issue costs: everything happens within equity
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Treasury shares bought back are deducted from equity and their purchase, sale or cancellation produces no gain or loss in profit or loss; the marginal costs of an equity issue are deducted from equity.
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Learning objectives
- Explain that treasury shares are deducted from equity and that no gain or loss is recognised on their purchase, sale, issue or cancellation.
- Account for the buy-back and then the resale of treasury shares.
- Explain that marginal costs directly attributable to an equity transaction are deducted from equity.
- Calculate the net amount recorded in equity after deducting issue costs.