# face value

(redirected from Face amount)
Also found in: Dictionary, Thesaurus, Legal, Acronyms, Wikipedia.

## Face Value

The amount of money stated on a bond or (rarely) a stock certificate. For example, if a bond certificate says \$1,000, the face value is \$1000. Bonds pay the face value at maturity, and calculate coupons as a percentage of the face value. Many bonds are issued at their face value, though discount bonds are not. The face value is also called the par value or simply par.

See par value.

## Face value.

Face value, or par value, is the dollar value of a bond or note, generally \$1,000.

That is the amount the issuer has borrowed, usually the amount you pay to buy the bond at the time it is issued, and the amount you are repaid at maturity, provided the issuer doesn't default.

However, bonds may trade at a discount, which is less than face value, or at a premium, which is more than face value, in the secondary market. That's the bond's market value, and it changes regularly, based on supply and demand.

The death benefit of a life insurance policy which is the amount the beneficiary receives when the insured person dies. It's also known as the policy's face value.

see PAR VALUE 1.

## face value

The value of an instrument (promissory note, bond, stock, etc.) as stated on the face of the instrument.The face value does not always equal the market value.

Example: A 5-year-old mortgage note with a face value of \$100,000 and an amortization term of 20 years at 2.8 percent interest is worth far less than \$100,000 for two reasons: (1) The principal balance is now a little under \$80,000. (2) Why would anyone invest even \$80,000 to earn 2.8 percent interest when he or she can get better returns in the marketplace? For both reasons, an investor would pay much less than the \$100,000 face value to buy the mortgage.

References in periodicals archive ?
As of the close of business on July 18, 2014, approximately USD1,407,263,000 in aggregate face amount of Old class A certificates and USD511,985,000 in aggregate face amount of Old class B certificates have been confirmed as tendered in exchange for like face amounts of the New class A certificates and New class B certificates, respectively.
Let's look at a scenario involving a 77-year-old female who owns an insurance policy with a \$900,000 face amount and a current cash surrender value of \$68,296.
In an attempt to mitigate the gain recognition, Peracchi transferred to NAC, in addition to the encumbered properties, a personal note with a face amount of \$1,060,000.
He recently addressed one of the challenges of selling LifeFund, which carries a premium about 30% more than the same face amount for a traditional permanent life insurance policy.
In the case of other cards (so-called "untariffed cards"), if they are sold directly to a person who does not purchase the card for resale, the face amount generally is the sales price.
2,000 = \$4,000 loan repayment [divided by] \$5,000 loan face amount X \$2,500 (basis reduction of \$5,000 - \$2,500).
Accordingly, it appears that if the contingency is met and the acquiring company issues the note to the seller, the note's face amount will be used to measure the assets' additional purchase price.
NEW ORLEANS -- Regulators adopted a statement for exposure that would warn buyers of insurance policies with small face amounts that they may pay more in premiums than they will receive in death benefits.
The statements in this news release that are not historical statements, including statements regarding our expectations about the limited partnership, the amount of settlement contracts to be purchased, the face amount of the underlying life insurance policies, and the possible accounting results from the transaction, including the effect on expenses, earnings and liquidity, are forward-looking statements within the meaning of the federal securities laws.
At the Spring Meeting, the Small Face Amount Working Group of the National Association of Insurance Commissioners' Life Insurance and Annuities Committee discussed its two-pronged effort to shed new light on those issues.
284 US 1 (1931), in which the Supreme Court held that a taxpayer realized ordinary income on the purchase of its own bonds in an arm's-length transaction at less than their face amount.

Site: Follow: Share:
Open / Close