The face value, sometimes called nominal value, is the value of a

coin A coin is a small object, usually round and flat, used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order to facilitate trade. They are most often issued by ...

, bond, stamp or

paper money Paper money, often referred to as a note or a bill (North American English), is a type of negotiable promissory note that is payable to the bearer on demand, making it a form of currency. The main types of paper money are government notes, which ...

as printed on the coin, stamp or bill itself by the issuing authority. The face value of coins, stamps, or bill is usually its legal value. However, their market value need not bear any relationship to the face value. For example, some rare coins or stamps may be traded at prices considerably above their face value. Coins may also have a salvage value due to more or less valuable

metal A metal () is a material that, when polished or fractured, shows a lustrous appearance, and conducts electrical resistivity and conductivity, electricity and thermal conductivity, heat relatively well. These properties are all associated wit ...

s that they contain.

Overview

The face value of bonds usually represents the principal or

redemption value Redemption value is the price at which the issuing company may choose to repurchase a security before its maturity date. A bond is purchased "at a discount" if its redemption value exceeds its purchase price. It is purchased "at a premium" if its ...

Interest In finance and economics, interest is payment from a debtor or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distinct f ...

payments are expressed as a percentage of face value. Before maturity, the actual value of a bond may be greater or less than face value, depending on the interest rate payable and the perceived risk of default. As bonds approach maturity, actual value approaches face value. In the case of

stock Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...

certificates, face value is the

par value In finance and accounting, par value means stated value or face value of a financial instrument. Expressions derived from this term include at par (at the par value), over par (over par value) and under par (under par value). Bonds A bond selli ...

of the stock. In the case of

common stock Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other C ...

, par value is largely symbolic. In the case of

preferred stock Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt ins ...

, dividends may be expressed as a percentage of par value. The face value of a

life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typical ...

policy is the death benefit. In the case of so-called "

double indemnity ''Double Indemnity'' is a 1944 American film noir directed by Billy Wilder and produced by Buddy DeSylva and Joseph Sistrom. Wilder and Raymond Chandler adapted the screenplay from James M. Cain's Double Indemnity (novel), novel of the same na ...

" life insurance policies, the

beneficiary A beneficiary in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. For example, the beneficiary of a life insurance policy is the person who receives the payment of the amount of ...

receives double the face value in case of accidental death. The face value of

property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, re ...

, casualty or

health insurance Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among ma ...

policies is the maximum amount payable, as stated on the policy's face or declarations page. Face value can be used to refer to the apparent value of something other than a financial instrument, such as a concept or plan. In this context, "face value" refers to the apparent merits of the idea, before the concept or plan has been tested. Face value also refers to the price printed on a ticket to a sporting event, concert, or other event (the price the ticket was originally sold for by the organization hosting the event). The practice of re-selling tickets for more than face value (or a certain amount above face value) is commonly known as ticket scalping. ''Taking someone at face value'' is assuming another person's suggestion, offer, or proposal is sincere, rather than a bargaining ploy.

Overview

See also

References

Further reading