In finance, a revaluation of fixed assets is a technique that may be required to accurately describe the true value of the capital goods a business owns. This should be distinguished from planned depreciation, where the recorded decline in value of an asset is tied to its age.
Fixed assets are held by an enterprise for the purpose of producing goods or rendering services, as opposed to being held for resale in the normal course of business. For example, machines, buildings, patents or licenses can be fixed assets of a business.
The purpose of a revaluation is to bring into the books the fair market value of fixed assets. This may be helpful in order to decide whether to invest in another business. If a company wants to sell one of its assets, it is revalued in preparation for sales negotiations.
Read more about Revaluation Of Fixed Assets: Reasons For Revaluation, Upward Revaluation, Downward Revaluation, Successive Revaluations
Famous quotes containing the word fixed:
“The foot of the heavenly ladder, which we have got to mount in order to reach the higher regions, has to be fixed firmly in every-day life, so that everybody may be able to climb up it along with us. When people then find that they have got climbed up higher and higher into a marvelous, magical world, they will feel that that realm, too, belongs to their ordinary, every-day life, and is, merely, the wonderful and most glorious part thereof.”
—E.T.A.W. (Ernst Theodor Amadeus Wilhelm)