A company’s authorized capital stock is the maximum number of shares of each class of capital stock that a company is legally permitted to issue, as authorized by the appropriate authority in the jurisdiction of incorporation and specified in the firm’s articles of incorporation.

Par value is an amount assigned to capital stock as specified in the company’s articles of incorporation and printed on the stock certificate.  Capital stock to which a par value has been assigned is par stock, while stock that has no par value is no-par stock.  When a company assigns a value to no-par stock, the stated value is accorded the same treatment as par value.

Issued capital stock is the amount of authorized capital stock issued by the firm and owned by the shareholders and held by the company, comprising both outstanding stock and treasury stock.  Unissued capital stock is the amount of authorized capital stock that either has never been issued or was once issued but has since been repurchased by the issuer and retired.

Issued Capital Stock
      Authorized Capital Stock
−    Unissued Capital Stock  
=    Issued Capital Stock

Outstanding capital stock is all of a company’s authorized capital stock that has been issued to and is still in the possession of the firm’s shareholders, it reporting the par or stated value of the company’s issued capital stock less treasury stock.

Treasury stock is the authorized capital stock that a firm had once issued and later repurchased but has not yet retired.  Treasury stock is treated as a deduction from equity, it decreasing the number of shares outstanding and cash by the amount used to buy back the shares and is carried as a contra-equity account.  Although issued, treasury stock is not outstanding – it receives no dividends, has no vote and is entitled to no other rights of ownership.  Treasury stock purchases are accounted for using either the cost method or the par value method.

Treasury Stock
      Issued Capital Stock
−    Outstanding Capital Stock  
=    Treasury Stock

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