The nominal value is the one with which a commercial document is issued.
The nominal value is the figure with which a commercial document (such as a share ) is issued. It should be noted that the idea of value can refer to the level of fitness or usefulness of something ; In the field of accounting and economics, value is the equivalence that exists between two things, generally taking into consideration a currency .
Security, on the other hand, can be a document that represents an amount borrowed or participation in a business company. In this context the idea of nominal value arises.
Said nominal value is the original , ideal or theoretical value. Instead, the actual value is the result of a specific measurement at a specific time. Typically, nominal value arises by convention, rule , or agreement.
Examples of face value
In a share, the face value is set by its issuer and appears in writing. Suppose a company goes public and, in its first securities issue, issues 10,000 shares with a par value of $50 each. Over time, share prices may change.
In this way, a share that was bought at $50 can be sold at $45 or $58 , to name a few possibilities. This means that the real value of the shares becomes, depending on the case, 45 or 58 dollars , and no longer the 50 dollars of the nominal value.
Shares have a nominal value and a real value.
Its importance among shareholders
In a company that has partners through shares, to mention one case, the nominal value of each one's shares plays a fundamental role because precisely the nominal value of these titles will determine which of the members has more or less weight within it. of the company to be able to make decisions.
Thus, for example, in any vote the choice of the member with shares worth 500,000 euros may be more relevant than the vote of the member with 1,000 euros in shares.
Nominal value of products
In a similar sense, a company in the dairy sector can launch a milk that it sells in one-liter cardboard containers for 10 pesos , specifying said nominal value on the box.
However, due to inflation , a few months later that same product began to be sold for 12 pesos . The real value of the product, therefore, increased by 2 pesos .
Other relevant information
In addition to everything stated above, it is necessary to know other relevant information about the nominal value:
- It plays a fundamental role in the studies and analyzes carried out when it comes to knowing the real state of a country's economy . Specifically, to discover the growth of the nation's economy.
- Mortgages, bonds and promissory notes can also be analyzed in depth through the face value they have.
- Within the field of metrotechnics, it is spoken of as the value obtained as a result of the measurement that has been carried out when analyzing data.
- In the field of engineering, on the other hand, when talking about nominal value, we are referring to the value given to a piece, an installation or a device in question in order to distinguish it from the real value.