We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is an IFRS Revaluation?

By Osmand Vitez
Updated Feb 11, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

An IFRS revaluation is an adjustment where a company must change or alter the value of a fixed asset for a specific purpose. The most common revaluations focus on a company’s property, plant, or equipment, which all fall under the large group of fixed assets. An IFRS revaluation changes the asset’s historical cost value — which is most likely how the company recorded the asset in the ledger — to a fair market value. The purpose of such an adjustment is to present accounting information in the most accurate manner possible. When a market does not exist for a specific fixed asset, an accountant may need to make an estimate of an asset’s value.

IFRS typically requires a fixed asset recorded at historical cost, which is the price a company paid for the item. A few extra costs may also be in this account, such as freight or shipping costs, installation fees, and costs for testing the equipment. The problem with this accounting theory is that the historical cost is not the market value for the fixed asset. For example, the asset may increase or decrease in terms of market value over time. Therefore, a company’s balance sheet may be under or overstated at some point in time, skewing the actual financial health of a company.

Under certain conditions, a company may need to make an IFRS revaluation on specific fixed assets. The revaluation model under IFRS has specific guidelines a company must follow; it may be best for a company to consult a licensed IFRS accountant in order to know the rules that apply in a given situation. In most cases, the company needs to find a market where similar assets are bought and sold under free market principles. Accountants must be very careful when selecting these markets for an IFRS revaluation and the possible prices for similar assets. In some cases, this market does not exist for specialized assets.

If an IFRS revaluation results in a decrease for a fixed asset’s value, the company most likely needs to make an adjustment that results in a loss on the books. The loss reduces the asset’s value on the balance sheet and most likely results in a loss against net income. A gain in the asset’s value may work in a similar manner, where the balance sheet value increases, and a gain goes against the company’s net income for the corresponding period. Other technical issues may present themselves due to the potential complexity for these accounting standards.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.