no par value capital stock

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In the USA and Canada, stock (shares) that have no par value or assigned value printed on the stock certificate. An advantage of such stock is that it avoids a contingent liability to stockholders in the event of a stock discount. For accounting purposes, on the issue of no par value capital stock, cash is debited and a capital stock account credited with the total proceeds received. No premium account is required. No par value shares are not permitted under UK law.

Subjects: Accounting.

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