face value
   HOME

TheInfoList



OR:

The face value, sometimes called nominal value, is the value of a
coin A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic 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 ...
, bond, stamp or
paper money A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes were originally issued ...
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 (from Greek μέταλλον ''métallon'', "mine, quarry, metal") is a material that, when freshly prepared, polished, or fractured, shows a lustrous appearance, and conducts electricity and heat relatively well. Metals are typical ...
s that they contain.


Overview

The face value of bonds usually represents the principal or redemption value.
Interest In finance and economics, interest is payment from a borrower 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 disti ...
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 Default may refer to: Law * Default (law), the failure to do something required by law ** Default (finance), failure to satisfy the terms of a loan obligation or failure to pay back a loan ** Default judgment, a binding judgment in favor of e ...
. As bonds approach maturity, actual value approaches face value. In the case of
stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
certificates, face value is the
par value Par value, in finance and accounting, means stated value or face value. From this come the expressions at par (at the par value), over par (over par value) and under par (under par value). Bonds A bond selling at par is priced at 100% of face val ...
of the stock. In the case of common stock, par value is largely symbolic. In the case of preferred stock, 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 between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death ...
policy is the death benefit. In the case of so-called " double indemnity" life insurance policies, the
beneficiary A beneficiary (also, in trust law, '' cestui que use'') 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 ...
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, ...
,
casualty Casualty may refer to: *Casualty (person), a person who is killed or rendered unfit for service in a war or natural disaster ** Civilian casualty, a non-combatant killed or injured in warfare * The emergency department of a hospital, also known a ...
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 ...
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.


See also

*
Denomination (currency) Denomination is a proper description of a currency amount, usually for coins or banknotes. Denominations may also be used with other means of payment such as gift cards. For example, ''five euros'' is the denomination of a five-euro note. Subu ...
*
Denomination (postage stamp) In philately, the denomination is the "inscribed value of a stamp". The denomination is not the same as the value of a stamp on the philatelic market, which is usually different, and the denominations of a country's stamps and money do not neces ...
*
Gresham's law In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable com ...
*
Nominal value In economics, nominal value is measured in terms of money, whereas real value is measured against goods or services. A real value is one which has been adjusted for inflation, enabling comparison of quantities as if the prices of goods had not ...
*
Par value Par value, in finance and accounting, means stated value or face value. From this come the expressions at par (at the par value), over par (over par value) and under par (under par value). Bonds A bond selling at par is priced at 100% of face val ...
* Place value * Token money


References

* * * {{Authority control Numismatic terminology Philatelic terminology