We know that issued shares = outstanding shares + treasury shares. So issued shares must be greater than treasury shares by definition. However, Starbucks' fiscal 2014 From 10-K reports

"Common stock ($0.001 par value) — authorized, 1,200.0 shares; issued and outstanding, 749.5 and 753.2 shares, respectively,"

which clearly contradicts with the concept. What is happening here?


Your accounting identity: " issued shares = outstanding shares + treasury shares" is correct, however you are forgetting that treasury shares are registered with a negative sign on balance sheet. So that's why issued shares are lower than outstanding shares.

  • 1
    $\begingroup$ I still do not understand. How can the number of shares be negative? $\endgroup$
    – Kun
    Dec 14 '15 at 16:07
  • $\begingroup$ They are not negative. It is just an accounting convention to register them with a negative sign. $\endgroup$
    – phdstudent
    Dec 14 '15 at 17:12
  • $\begingroup$ If they are not negative, shouldn't issued shares be greater than outstanding shares since it includes treasury shares? $\endgroup$
    – Kun
    Dec 14 '15 at 20:23
  • $\begingroup$ No. Issued shares should be lower than outstanding shares. As you said: issue shares = outstanding shares + treasury shares, and as I said treasury shares < 0 (by convention). $\endgroup$
    – phdstudent
    Dec 14 '15 at 20:35
  • $\begingroup$ How can treasury shares be negative? we are adding shares whose number must be positive. Would you recommend some reading on this please? $\endgroup$
    – Kun
    Dec 14 '15 at 20:49

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