Face value is the nominal value stated on a financial instrument. It is the fixed amount officially assigned to a share or bond at issuance. This value is separate from the current market price at which the instrument is traded. 

The face value forms the administrative basis of a financial instrument but does not reflect its actual market value.

For bonds, the face value is the amount the issuer repays to the investor at maturity. Interest is often calculated as a percentage of this nominal value. For shares, the face value is usually a small amount per share that is legally established when the company is formed.

The market price of a share, however, can be much higher or lower than its face value, as it is determined by supply and demand, profit expectations and economic conditions. For investors, it is important to understand that face value mainly has a formal or accounting meaning, while the market price determines the return.

Short example:

Suppose a bond has a face value of €1,000 and an interest rate of 5 percent.

This means the investor receives €50 in interest annually and €1,000 back at the end of the term.

If the bond is traded on the market for €950 or €1,050, the face value does not change, but the return for the buyer does.

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