Is the Book Value and the Face Value of a share one and the same thing?



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Are these two terms Book Value and Face Value used interchangeably or are they different things?

1 Answer(s)


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No they are 2 different things.

Face value of the share is the price of the share at the time of its origination on day 1. That is the value that a company is required to put on a share. Different countries regulation stipulate different amounts. It could be $1 or $5 or $10 - the company chooses this number.

Once the share is issued at its book value, based on the operations of the company the share price will go up or down. If the share price goes above the face value then it is said to be at a premium. If the share price goes below the face value then it is said to be at a discount.

The book value of equity is also expressed as Assets-Liabilities on the company's balance sheet.

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