Question

Write the note on memorandum of revaluation account .

Answer 1

The values of all of a firm's assetsmust be recognized and documented in their accounts. The initial values of these assets are taken from their current market values. Some assets fluctuate over time due to changes in market value. When an asset increases in value, a revaluation is necessary. If the asset were to decrease in value, then an impairment would be necessary.

Revaluation is the positive difference between an asset's fair market value and its original cost, minus depreciation. Revaluations are recognized in a firm's equity and do not affect the income statement