Revaluation changes the value of an asset and usually results in an increase in the value of an asset. One of the main reasons for revaluation of an asset is to accurately reflect the fair market price of the asset. Therefore, it is sometimes necessary to decrease the value of an asset.
, , and are all adjustments to the acquisition price, and the for those transactions is a balance sheet account. The might be different, depending on the transaction.
The most common of these three fixed asset transaction types is and the usual offset account is a profit and loss account.
is less common, and when used, is usually a different balance sheet account.
can be used for both write up and write down transactions, and the reason for having revaluation as a separate transaction type is the specific functionality of revaluation proposals, which is available for this transaction type in the fixed assets journal.
To set up for a fixed asset, complete the following steps.