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If you imagine in the stock market prices are often quoted to many decimal places.

For example: USD 27.4955

This smells like a monetary value e.g. it has a currency code and a value however it doesn't look like money because of course if you asked me to give you $24.4955 I can't.

Is there a term in accounting that describes this sort of "approximate" value which seems a lot like money but isn't quite?

For clarity my definition of "money" is real world amounts specific to the Major and Minor units that that currency can be quoted in.

DJClayworth
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MrEdmundo
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3 Answers3

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of course if you asked me to give you $24.4955 I can't.

No, but if I asked you to give me $24.4955 and you gave me a piece of paper saying "I O U $24.4955", and then this happened repeatedly until I had collected 100 of these pieces of paper from you, then I could give them back to you in exchange for $2449.55 of currency.

There's nothing magical about the fact that there doesn't happen to be a $0.001 coin in current circulation.

This question has some further information.

Community
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Vicky
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The Coinage Act of 1792 of the Continental Congress established that the lowest money of account for the United States is one-thousandth (1/1000) of a dollar. This sub-unit is the mille (also written mil, mill). Other sub-units given by the act are the disme for one-tenth (1/10) of a dollar (for which, etymologically, is the origin of the word dime), and the cent for one-hundredth (1/100) of a dollar. The ten-thousandth of the dollar value is taken on account by a few financial organizations, but has no official given term. For the monetary value of USD 27.4955, it may be quoted as twenty-seven dollars, forty-nine cents, and five-and-a-half milles.

Stuart
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I recently bought a stock - enter image description here which was priced exactly as your question ponders, to the 1/100 cent. I happened to buy 2000 shares, but just a round lot of 100 would be enough to create no need for rounding.

It's common for industry to price this way as well, where an electronic component purchased by the thousands, is priced to the tenth or hundredth of a cent.

There's nothing magic about this, and you'll have more to ponder when your own lowest unit of currency is no longer minted. (I see you are in UK. Here, in the US, there's talk of dropping our cent. A 5 cent piece to be the smallest value coin. Yet, any non-cash transactions, such as checks, credit card purchases, etc, will still price to the penny.)

To specifically answer the question - it's called decimal currency. 1/10, 1/100 of a cent.

JoeTaxpayer
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