Par Value Stock Capital Meaning

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Par value stock is stock with a nominal amount per share specified in the corporation’s governing documents.

Example

A company issues 1,000 shares with par value of 1 for 6 each. Share capital at par is 1,000 and the excess is 5,000.

Remember the difference

Par value is a legal or nominal amount. It is not the share’s market price or book value.

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Updated 3 November 2026. Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.

Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.

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