Definition of Revaluation reserve:
Companies have the flexibility to create line items for reserves on the balance sheet when they feel it is necessary for proper accounting presentation. Companies may use reserves for various reasons, including asset revaluation. Like most reserve line items, the revaluation reserve amount either increases or decreases the total value of balance sheet assets.
Revaluation reserve is an accounting term used when a company creates a line item on its balance sheet for the purpose of maintaining a reserve account tied to certain assets. This line item can be used when a revaluation assessment finds that the carrying value of the asset has changed.
Reserve account that records the surplus created when assets are revalued (see revaluation). It is a paper or unrealized reserve.
How to use Revaluation reserve in a sentence?
- Revaluation reserves have an offsetting expense that is debited (increased) or credited (decreased) depending on the change from revaluation.
- Companies use revaluation reserve lines on the balance sheet to account for value fluctuations in long-term assets.
- Revaluation reserves are most often used when an asset’s market value greatly fluctuates or is volatile due to currency relationships.
Meaning of Revaluation reserve & Revaluation reserve Definition