1. Similar to an investment in another firm's shares, the acquisition of a company's own shares creates an asset.
2. The SEC permits gains and losses on treasury stock transactions to be reported on the income statement.
3. Options and warrants are critical to the earnings per share computation because they are always considered dilutive.
4. Share-based compensation plans are focused on stock option awards so as to minimize the possibility that the employees receiving the grants will feel they are receiving potentially no value.
5. The realized gain or loss for the difference between the carrying value and the cash received from selling an AFS security is excluded from net income since it flows through OCI.
6. The accounting for the conversion to common stock of convertible preferred stock may involve recognition of a gain or loss if the par value of the preferred stock is different from the par value of the common stock