Accounting for the revaluation of non-current assets
When a non-current asset rises in value, a company records the increase. It credits a revaluation reserve — not profit — to show the gain.
Formula
Revaluation Surplus = New Carrying Amount − Old Carrying Amount
Real World
British Land revalued its London office buildings in 2023, adding £120 million to its revaluation reserve after independent surveyors confirmed rising property prices in the City.
Exam Focus
Always credit the revaluation reserve, never the income statement — examiners penalise students who treat the surplus as profit.
Essay Framework
Use PEEL to structure every paragraph. Tap each step for guidance and an example.
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