The Definition of Nominal Value

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A "nominal value" is the stated value of a security, stock or any other asset of value. This value remains fixed despite market fluctuations. In contrast to a nominal value is a "market value" or "real value," which changes with the market and other factors, such as inflation.

Other Names

Nominal value is also known as "fixed value" when referring to securities or "book value" when referring to capital goods.

Stocks

Shares of stock can also be referred to by their nominal value; however, market values are more common. When the market value is higher than the nominal value, this is known as a "share premium."

Debt

Nominal values are also used to determine debt. A nominal value of debt is the amount, at any given time, that the debtor owes his creditors.

Money

Money also has an associated nominal value. The nominal value of money is the stated, fixed standard for comparing money (e.g., $1 is always 100 cents). The nominal value of money does not take inflation, the money's actual purchasing power, or currency exchange into consideration.

Etymology

The word "nominal" is derived from the Latin word "nominalis," which means "belonging to a name."

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