Revaluing an asset

Over time, the fair market value of a fixed asset may increase or decrease due to changes in market conditions, inflation, or the asset's condition. Usystems allows you to revalue an asset to reflect its current fair market value. A revaluation updates the asset's net book value and records the difference in a revaluation surplus (or deficit) account, keeping your balance sheet aligned with current economic reality.

Before you start

• The asset must already be registered in Usystems and have an accumulated-depreciation history.
• You need permission to create fixed-asset transactions (typically logistics_admin group or equivalent).
• You should have an independent valuation or appraisal showing the asset's new fair market value.
• Revaluations are typically performed annually or when market conditions significantly change.
• Choose a revaluation date (usually year-end, but can be any date when the valuation occurs).
• Know the new fair market value of the asset.

Steps

1. Go to Fixed Assets in the top navigation. Open in Usystems

2. Find and click the asset you wish to revalue from the list.

3. On the asset detail page, click Revalue Asset or Record Revaluation (or a similar action button at the top of the page).

4. Fill in the Revaluation Details form:

   • Revaluation Date: Enter the date on which the new valuation is effective (usually year-end or the appraisal date).
   • New Fair Market Value: Enter the newly assessed fair market value of the asset.
   • Valuation Method or Notes: Optionally describe how the valuation was determined (e.g., "independent appraisal by XYZ," "market comparison," "adjusted for inflation").

5. Click Submit or Record Revaluation to complete the transaction.

6. Review the confirmation screen. Usystems will show:

   • The asset's original cost.
   • Its previous net book value (cost minus accumulated depreciation).
   • The new fair market value you just entered.
   • The revaluation difference (gain or loss due to the revaluation).

Accounting impact

When you record an asset revaluation, Usystems posts the following entries to your general ledger:

• If the new value is higher than the previous net book value (upward revaluation):

  • Debit: Fixed Asset account (increases the asset's carrying value).
  • Credit: Revaluation Surplus account (records the increase in a separate equity account).
  • This adjustment does not flow through profit and loss; it goes directly to equity.

• If the new value is lower than the previous net book value (downward revaluation):

  • Debit: Revaluation Deficit account (records the decrease; may affect profit & loss if the surplus previously existed).
  • Credit: Fixed Asset account (decreases the asset's carrying value).
  • Any excess loss is typically expensed to the current period.

The revaluation ensures that your balance sheet shows the asset at its fair market value, and your equity section reflects the cumulative revaluation adjustments over time.

Tips & common mistakes

• Obtain independent valuation support. Do not guess; use a professional appraisal, market quotes, or other objective evidence of fair value.
• Revalue consistently. If you revalue one asset in a category, consider revaluing all similar assets in the same category in the same period for consistency.
• Record the revaluation promptly. Once a new valuation is available, record it in the same accounting period so your books stay current.
• Monitor the revaluation surplus. The revaluation surplus can only be reversed if the asset is subsequently sold at a loss. Keep track of these adjustments over the asset's life.
• Review the GL impact. After revaluation, check your journal or trial balance to ensure the gain or loss and the revaluation-surplus posting are correct.