The text states that a company cannot earn profit from equity transactions. Why might this be? If

Question:

The text states that “a company cannot earn profit from equity transactions.” Why might this be? If a company buys widgets at $10 and resells them at $13, there is a $3 profit. What’s the difference if a company buys back some of its own stock for $25 per share and resells it at $28 per share? Why do you think that do not allow a profit (or loss) to be recorded on equity transactions?

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...