All of the following regarding accounting for Treasury Stock under U.S. GAAP and

Question

All of the following regarding accounting for Treasury Stock under U.S. GAAP and IRFS are true except:
1-Only gains are recognized on retirements of treasury stock under IFRS.
2-Gains are not recognized on retirements of treasury stock under U. S. GAAP.
3-IFRS applies the principle that companies do not record gains or losses on transactions involving their own stock.
4-U. S. GAAP applies the principle that companies do not record gains or losses on transactions involving their own stock.
5-A company's assets and equity are always reduced by the amount paid for the retiring stock.

Explanation / Answer

1-Only gains are recognized on retirements of treasury stock under IFRS.

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