What Is Treasury Stock?

Treasury stocks (also known as treasury shares) refer to the percentage of a company’s equity that is kept in its own treasury. They might have come from a portion of the float and outstanding shares before the business repurchased them, or they could have never been offered to the public at all.
The advantages of owning treasury stock for a firm include restricting outside ownership and keeping stock on hand to issue to the public if money is needed in the future.

Treasury stock is one of the various types of equity accounts reported on the balance sheet statement under the stockholders’ equity section as a contra-equity account.

In simple words, Treasury stocks are shares that were originally part of “shares outstanding” but that have been repurchased by the company.

Treasury stock reduces total shareholder’s equity on a company’s balance sheet, and it is therefore a contra equity account.