Question

in what circumstances revaluation of assets and liablities becomes necessary

Answer 1

1. At the time of liquidifcation of the company/firm, which basically means dissolution or winding up of a business activity to calculate revaluation profit or loss and bear it / distribute it evenly among all the entities responsible for the business operations.

2. At the time of calculation of capital profits, as revaluation of assets and liabilities is basically done to calculate capital profit or loss which is basically also known as revaluation profit or loss, the revaluation protocol is necessary.

3. At the time of admission of a new entity into the business firm, death or retirement of an entity from the firm to calculate the gains on capital or loss on capital and bear them accordingly or distribute them properly among themselves prior to admitting/retiring someone.