Why do treasury stock transactions usually bypass gains and losses even when the shares are retired?
I understand cost method, but I am unsure why retirement also avoids income statement effects.
Reacquiring, reissuing, or retiring a company's own shares is an owner-equity transaction rather than a performance transaction. Retirement can change which equity accounts are removed or reduced, but it still does not create an income statement gain or loss from dealing in the company's own stock.
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