Parwaarde

Parwaarde, or par value, is the nominal or face value assigned to a security at the time of issue, as stated in its issuing document. The concept is used for both shares and debt instruments and serves as a fixed reference point in accounting and, in some cases, legal capital requirements. In modern markets, the parwaarde is often distinct from the instrument’s market price.

For shares, parwaarde is the per‑share nominal amount recorded in the company's charter or articles. The total parwaarde of all issued shares traditionally represents the company’s legal capital, which in many jurisdictions is intended to protect creditors by anchoring a minimum level of contributed capital. In practice, many companies issue shares with a low parwaarde or even no par value, and the legal framework may determine capital in ways that do not rely on a fixed par value. Any amount paid by investors above the parwaarde is typically recorded as share premium or paid-in capital.

For bonds and other debt securities, parwaarde is the amount that is repaid to the holder at maturity (the face value). Coupon payments are usually calculated as a percentage of parwaarde, though the price at which the bond trades in the market can be above or below par depending on interest rates, credit risk, and other factors.

Parwaarde is not generally the same as the instrument’s current market price. While parwaarde can influence accounting treatment and certain legal requirements, market value reflects prevailing supply, demand, and risk assessments. The relevance of parwaarde varies by jurisdiction and by whether the instrument uses a par value or a no-par model.