How to revalue fixed assets?
To practice a revaluationit is necessary to determine the present value of each immobility tangible or financial, i.e. its value in use. The company must use the appropriate methods. The evaluation carried out by the company is a management decision that is binding on it.
The interest of the method lies in an overall increase which makes it possible to increase equity on the liability side of the balance sheet. At the end of the revaluation, the amortization plan is modified and the new VNC is substituted for the old one. All the other elements remain the same (amortization rate, remaining term, etc.).
The revaluation of fixed assets is an exception to the principle of accounting at historical cost (or monetary nominalism). As soon as it is implemented, it must relate to all tangible and financial fixed assets (depreciable or not), without the possibility of choice in favor of certain assets.
For non-depreciable fixed assets, taxation of the revaluation difference is deferred until its subsequent sale. To obtain the deferral, the company must undertake to calculate the capital gain or loss (in the event of transfer) from the non-revalued value (original value).
Conclusion: the practice of the free revaluation method for fixed assets has accounting consequences. It gives rise to special accounting entries and certain tax restatements. In addition, special information must be inserted in the appendix to the annual accounts.