Account 419 - Treasury shares
1. Accounting principles

This account is used to record existing value and increases decreases of shares bought back from joint-stock companies among stocks issued to public by such companies to re-issue afterwards (called as Treasury shares)
Treasury shares are shares issued by companies and bought-back by the companies which issued shares, but they are not cancelled and shall be re-issued in the period which complies with law on securities. Treasury shares are hold by companies which do not received dividend, have no right for election or join to share assets when companies are dissolved. When distributing dividend for shares, Treasury shares hold by companies shall be considered as not yet sold.
b) Value of Treasury shares is recorded in this account under to prices actually bought-back, including back-buying prices and expenses directly related to back-buying of shares, such as expenses of transaction and information...
c) At the end of accounting period, when making financial report, actual value of Treasury shares shall be recorded a decrease in owner‘s capital on the balance sheet by negative entry (…).
d) This account will not record the value of shares which companies bought from other joint-stock companies for investment purposes.
dd) Cost of Treasury shares when re-issuing or using to pay dividend, bonus, etc shall be calculated according to weighted average method.

2. Structure and contents of account 419 – Treasury shares
Debit side: Actual values of Treasury shares when buying
Credit side: Actual values of Treasury shares re-issued, distributed as dividend, or cancelled
Debit balance: Actual values of Treasury shares being held by companies

3. Method of accounting for several major transactions
Accounting for buying back shares which are issued by companies themselves:
- When companies finished procedures for buying back shares issued by companies themselves in accordance with law provisions, accountants will implement the payment procedure for shareholders, according to agreement prices for buying, selling and receiving shares, record:
Dr 419 - Treasury shares (repurchase price of shares)
Cr 111, 112.
- During the process of buying back shares, when incurring expenses directly related to buying-back of shares, record:
Dr 419 - treasury stocks
Cr 111, 112.
Re-issuing of Treasury shares :
- When re-issuing Treasury shares with price higher than actually bought back price, record:
Dr 111, 112 (Total payment price of re-issuing shares)
Cr 419 - Treasury shares (repurchase real price of shares)
Cr 411 - Owner‘s capital (4112) (differences from re-issued price higher than real price for buying back of shares)
- When re-issuing Treasury shares to market with price lower than real price for buying-back of shares, recorded:
Dr 111, 112 (Total payment price of re-issuing shares)
Dr 4112- - Share premium (re-issue price less than repurchase price)
Cr 419 - Treasury shares (repurchase real price of shares).
c) When canceling treasury shares, record:
Dr 4111 – contributed capital of owners (Face value of cancelled shares);
Dr 4112 - Share premium (re-purchase price higher than face value)
Cr 419 - Treasury shares (repurchase real price of shares).
d) When having the decision of managing board (approved by shareholders‘ meeting) distributing dividend in Treasury shares:
- In case issued price of treasury shares at the date paying dividend in shares is higher than real price of buying back treasury shares, record:
Dr 421 - undistributed post-tax profits (issue price of shares)
Cr 419 - Treasury shares (repurchase real price of treasury shares).
Cr 4112 - Share premium ( differences from repurchase price of treasury shares lower than issue price at the date of payment of dividends)
- In case issued price of treasury shares at the date paying dividend in shares is lower than real price of buying back treasury shares, record:
Dr 421 - undistributed post-tax profits (issue price of shares)
Dr 4112 - Share premium ( differences from repurchase price of treasury shares higher than issue price at the date of payment of dividends)
Cr 419 - Treasury shares (purchase real price of treasury shares).

Source: Circular 200, Article 73