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Revaluation of fixed assets is the process of increasing or reducing the book value of fixed assets. International Financial Reporting Standards (IFRS) stated that initially fixed assets are recorded at cost, But it allows two models for subsequent accounting of fixed assets, namely: cost model and revaluation model. If a revaluation policy is adopted, it should be adapted to all assets in the entire category. Such as - if you re-evaluate a building, You must revalue all land and buildings in that asset class. It should be noted that the organization must be carried out on a regular basis so that the book value does not differ materially from that which will be determined Using the fair value at the reporting date. Accounting entries for revaluation If you decide to revalue non-current assets (fixed assets), you have to give a series of accounting adjustments. The revaluation adjustments for non-current assets are shown below: The carrying amount of non-current assets at the revaluation date Valuation of non-current assets (price of revalued assets) Difference = gain or loss from revaluation ProcessingRe-evaluation of gains A revaluation gain is always recognized in equity (unless the gain reflects a revaluation loss on the same asset that was previously recognized in the income statement). The accounting entry is as follows: Cost of non-current assets (difference between valuation and original cost) Dr Credit Accumulated depreciation (with accumulated depreciation of historical cost) Dr Credit Revaluation profit/reserve Cr debit
