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An accelerated share repurchase (ASR) is an investment strategy where a publicly-traded company expeditiously buys back large blocks of its outstanding shares from the market by relying on a go-between investment bank to facilitate the deal.
An ASR transaction is a privately negotiated contract between a company and an equity derivatives dealer, and is typically documented as a stand-alone, long-form confirmation to a form of ISDA Master Agreement.
Share buybacks can create value for investors in a few ways: Repurchases return cash to shareholders who want to exit the investment. With a buyback, the company can increase earnings per share, all else equal.
A stock buyback is solely a balance sheet transaction, meaning that it doesn't affect the company's revenue or profits. When a company buys back stock, it first reduces its cash account on the asset side of the balance sheet by the amount of the buyback.
The company can make the journal entry for repurchase of common stock by debiting the treasury stock account and crediting the cash account. Treasury stock is a contra account to the capital account (e.g. common stock) in the equity section of the balance sheet.