What is the significance of "par value" for accounting purposes?
A)The par value determines the amount of contributed surplus.
B)Par value has no economic significance for accounting purposes.
C)Par values determines the amount of cash received from investors.
D)Par value shares are not permitted under IFRS or ASPE.

Question

Quizplus · Accepted Answer

Par value has no economic significance for accounting purposes. It is a nominal value assigned to each share for legal purposes and does not reflect the true value of the share or the amount received from investors. Therefore, it does not affect the accounting treatment for the issuance of shares or the calculation of contributed surplus.

What Is the Significance of "Par Value" for Accounting Purposes