Stated value

Stated value is the amount assigned to a share of stock and recorded in the issuer's accounting records. This value is only assigned when a share has no par value. The amount of the stated value increases the capital stock account of the issuer when a share is issued. The amount recorded is typically quite low, in the range of $0.01 to $1. A business is not supposed to issue dividends or buy back shares if doing so will reduce its capital stock account below the amount represented by the stated value of its shares.

The stated value is unrelated to the current market price of a share.

Related Courses

Accountants' Guidebook 
GAAP Guidebook