09
Sep
How To Account For Revaluation Of Fixed Assets. Force the carrying amount of the asset to equal its newly-revalued amount by proportionally restating the amount of the accumulated depreciation. What is a Revaluation. They are generally referred to as property plant and equipment PPE and are referred to. It should be kept on its historical book cost value.
On the Ledger accounts tab select a value model. This is an option under International Financial Reporting Standards but is not allowed under Generally Accepted Accounting Principles. Adjusting the cost of asset ie. Use the Fixed asset posting profiles form to designate the ledger accounts for fixed asset revaluation and adjustments. In finance a revaluation of fixed assets is an action that may be required to accurately describe the true value of the capital goods a business owns. Cost Model and Revaluation Model.
Fixed Assets revaluation is the process of increasing or decreasing the carrying value of fixed assets.
As per the cost concept we have no right to record increase or decrease in the value of fixed asset. In the journal entries of revaluation of assets we record all changes in the value of fixed assets. In general value of assets decrease over time but it may increase in certain circumstances especially in inflationary economies. Revaluation of a fixed asset is the accounting process of increasing or decreasing the carrying value of a companys fixed asset or group of fixed assets to account for any major changes. This should be distinguished from planned depreciation where the recorded decline in value of an asset is tied to its age. This video looks at revaluation of fixed assets and how to record it in the accounts.