Par value
Financial Accounting glossary · Stockholders' Equity
Definition
Nominal value assigned to a share or bond by its issuer; primarily a legal construct.
Par value in plain English
Par value is a tiny 'official' number stamped on a share of stock or a bond by the company that issues it, mostly for legal paperwork reasons rather than what the thing is actually worth. Think of the face value printed on a gift card: you might have bought it on sale, but the printed number is just a formal label. A share might have a par value of one cent yet trade for $200 in the real market, because par has almost nothing to do with real value. For bonds, though, par (also called face value) matters more, because it's the amount the borrower promises to pay back at the end.
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