Stated Value
A stated value is an amount assigned to a corporation's stock for internal accounting purposes when the stock has no par value. Like par value — which is the face value of a stock stated in the corporate charter — stated value is nominal, typically between $0.01 and $1.00. As an example, if the stated value of a company is $0.01 per share and the company issues 1 million shares, the stated value of its stock is $10,000. A company can choose to issue no par value stock, but for its own records, it must assign a stated value to satisfy the minimum requirement for legal capital in the state where it incorporates. A company can choose to issue no par value stock, but for its own records, it must assign a stated value to satisfy the minimum requirement for legal capital in the state where it incorporates.
What Is a Stated Value?
A stated value is an amount assigned to a corporation's stock for internal accounting purposes when the stock has no par value. Like par value — which is the face value of a stock stated in the corporate charter — stated value is nominal, typically between $0.01 and $1.00. The stated value has no relation to market price.
How the Stated Values Work
A company can choose to issue no par value stock, but for its own records, it must assign a stated value to satisfy the minimum requirement for legal capital in the state where it incorporates. As an example, if the stated value of a company is $0.01 per share and the company issues 1 million shares, the stated value of its stock is $10,000. This amount is credited to the company's capital stock account and is considered the legal capital of a corporation.
Because it is generally illegal for a company to pay dividends or repurchase shares if doing so impairs the legal capital, the stated value helps to provide shareholders with some protection. However, in practice, with the stated value per share as low as one penny, monetary interest is modest or de minimus.
No Par Value Example
Apple Inc.'s balance sheet for its fiscal year 2019 showed an authorization of 12.6 billion no par value shares and 9.2 billion shares issued and outstanding. The common stock in the shareholders' equity account was worth $45.2 billion as of the end of the fiscal year. There is no note in Form 10-K that breaks down the account into stated value and additional paid-in capital amounts, but it can be assumed that almost all of the $45.2 billion represents additional paid-in capital.
Related terms:
10-K
A 10-K is a comprehensive report filed annually by a publicly traded company about its financial performance and is required by the U.S. Securities and Exchange Commission (SEC). read more
Additional Paid-In Capital (APIC)
Additional paid-in capital is the excess amount paid by an investor above the par value price of a stock during an initial public offering (IPO). read more
Balance Sheet : Formula & Examples
A balance sheet is a financial statement that reports a company's assets, liabilities and shareholder equity at a specific point in time. read more
Capital Stock
Capital stock is the number of common and preferred shares that a company is authorized to issue, and is recorded in shareholders' equity. read more
Dividend
A dividend is the distribution of some of a company's earnings to a class of its shareholders, as determined by the company's board of directors. read more
Fixed-Income Security
A fixed-income security is an investment providing a level stream of interest income over a period of time. read more
Full Stock and Examples
Full stock is a stock with a par value of $100 per share. A full stock issue can be either a preferred share or common share. read more
Market Price
The market price is the cost of an asset or service. In a market economy, the market price of an asset or service fluctuates based on supply and demand and future expectations of the asset or service. read more
Nominal Value
Nominal value of a security, often referred to as face or par value, is its redemption price and is normally stated on the front of that security. read more
No-Par Value Stock
No-par value stock is issued without the specification of a par value indicated in the company's articles of incorporation or on the stock certificate. read more