Revaluation

Revaluation is the process of reassessing and adjusting the recorded value of an asset, a currency, or a tax base to reflect a more current estimate of its value. It is commonly used in accounting to restate asset values, in monetary policy to adjust the value of a currency, and in public finance to update property valuations for taxation.

In accounting, revaluations apply mainly to tangible fixed assets under the IFRS revaluation model (IAS 16). When an asset’s carrying amount increases, the gain is usually recorded as a revaluation surplus in equity, unless it reverses a prior decrease charged to profit or loss. A decrease is charged to profit or loss unless there is a credit balance in the revaluation surplus for that asset, in which case the decrease reduces the surplus. Depreciation is recalculated based on the new carrying amount. Revaluations may be conducted when reliable fair value measurements are available, and they often require independent appraisals. Frequency varies by asset type and policy.

With currencies, revaluation refers to an official adjustment in the value of a currency relative to others, typically within a fixed or managed exchange-rate system. An appreciation (revaluation) makes the currency stronger; a depreciation is the opposite. Revaluations are used to correct misalignments, influence inflation, or adjust external debt burdens and are part of broader monetary policy or macroeconomic stabilization measures.

In public finance, revaluation commonly describes updating the assessed value of properties for tax purposes. Updated valuations can change tax liabilities, affect budget planning, and reflect changes in market conditions, property improvements, or periodic reassessment cycles. Revaluations may also occur in other contexts to update fair values of investments or equipment on financial statements.