Every business entity is forced to value its assets for different purposes.Fixed assets can be tangible like the ones mentioned above and capital work-in-progress, that is, fixed assets under construction / installation as well as intangible such as goodwill and brand. The discussion in this chapter is with reference to tangible fixed assets.An entity has the option of revaluing its tangible fixedassets. However, where such a policy is adopted itshould be applied consistently to all tangible fixedassets of the same class.Where a tangible fixed asset is revalued its carryingamount should be its current value at the balancesheet date. Generally this requirement is achieved byperforming a full valuation at least every five years andan interim valuation in year, with an interimvaluation in the intervening years where it is likelythat there has been a material change in value.Alternatively, for a portfolio of non-specialisedproperties, a full valuation may be performed on arolling basis over a five-year cycle, together with aninterim valuation on the remaining portfolio where itis likely that there has been a material change in value.For tangible fixed assets other than properties wherethere is an active second-hand market or appropriateindices, such that the entity’s directors can establish theasset’s value with reasonable reliability, an annualrevaluation by the directors may be sufficient, withoutnecessarily using the services of a qualified valuer.Revaluation gains are recognised in the statement oftotal recognised gains and losses except to the extentthat they reverse revaluation losses on the same assetthat were previously recognised in the profit and lossaccount, in which case they, too, should be recognized in the profit and loss account, after adjusting forsubsequent depreciation
