Definition of Face Value



Face value is the base value or par value of a debt or an equity instrument. In debt instruments like bonds, debentures, and treasury bills normally have a face value of $1000. Whereas equity instruments like common shares and preference shares can have different face values.

 


As per accounting standards, the companies are required to mention the share capital at face value or par value and show the amounts paid in access of the face value separately. Whereas in case debt the amount of liability is shown that is equal to the amount raised at the time of loan term.


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