Revaluation Fundamentals

After you set up revaluation codes and revaluation indexes, you can calculate asset revaluation.

Revaluation is the process by which the costs of assets are restated in terms of current worth. The basic concept behind revaluation is that of comparability. The question is whether over time you can make a meaningful comparison between financial statements when such factors as the rate of inflation and the current cost of assets are considered.

A number of theories of revaluation exist. Two of the more prominent theories are:

• Constant currency accounting

• Current cost accounting