Treasury stock and share buyback accounting. How does it work, and how does it affect the financial statements? In this video we show how purchases of treasury stock (or “share buybacks”) affect the cash flow statement and the balance sheet, we walk through the accounting for both share buybacks as well as re-issuing shares, and discuss the effect of share buybacks on earnings per share. All of this in the context of a real-life example, so this goes beyond just the textbook explanation!

⏱️TIMESTAMPS⏱️
00:00 Introduction to treasury stock
00:29 Stock repurchase example
01:39 Accounting for share buybacks
02:11 Treasury stock on the balance sheet
02:37 Treasury stock overview
03:04 Accounting for re-issuing treasury stock
04:32 How share repurchases affect EPS

Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!