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Bulletin HASKINS & SELLS 79 Non-Par Value Stock from an Accounting Point of View THE original purpose back of the law providing for issue of stock without par value seems to have been to remove any expression or impression of a fixed value attaching to such shares; this for such benefit or effect as it might have in the affairs of corporations and their relations with those who contribute capital to corporate enterprises. A note of paternalism is sounded by some writers who, in attempting to explain the reasons for the law, credit the law-makers with a desire to protect the investor who buys a share of stock at a fixed price of $100 and looks upon the disbursement as a loan to a corporation which amount he expects to be able to recover whenever he so desires. Whether or not this somewhat laudable motive was in the mind of the law-framer may never be known, but the effect of the law is to stamp the transaction as a proprietary venture and so far as it concerns the investor to put him on notice to inquire as to the value of his share. The law has a distinct advantage for directors who desire to be honest and straightforward since it relieves them of the necessity of becoming parties to a fiction which has often been misleading. This fiction has in the past been particularly true in cases involving patents, copyrights, good-will, contracts, mines, etc., where there is usually more or less difficulty in fixing the value of such acquisitions. Under a law providing for common stock without par value, the situation and procedure appear immediately to be much simplified. The common shareholder, regardless of what he may have paid for his stock, becomes entitled to such proportion of the net assets, after deducting the value of any preferred shares outstanding, as the number of his shares bears to the total number of common shares outstanding. The aggregate value, or the equity of the common shareholders, is determined by the excess of assets over liabilities and preferred shares. The value