Face Value, also known as par value or nominal value, refers to the value printed on a financial instrument such as a share, bond, or debenture, representing its original worth as stated by the issuing entity. It is the amount the holder will receive from the issuer at the time of maturity in the case of debt instruments or the base value assigned to shares at issuance.

In the context of equity shares, the face value is the fixed denomination decided by the company at the time of issuing shares. For instance, if a company issues shares with a face value of ?10, it means each share has a nominal worth of ?10, regardless of its market trading price. The market value of a share, however, may fluctuate significantly due to factors like demand, company performance, and market conditions.

For bonds and debentures, face value represents the principal amount that the issuer agrees to repay the investor upon maturity. For example, a bond with a face value of ?1,000 and a 7% coupon rate pays ?70 in interest each year until maturity, when the investor receives back the ?1,000 principal. Thus, it serves as the basis for calculating interest payments.

Understanding face value is important for investors as it helps differentiate between a securityís nominal value and its market value. In cases like stock splits or bonus issues, a company may alter the face value of its shares without changing the overall value of the investorís holdings.

In essence, face value serves as an accounting and legal reference point for securities, determining interest payments, dividend declarations, and other corporate actions. While it may not always reflect the assetís current market worth, it remains a fundamental concept in financial valuation and reporting.