4. The Revaluation Model
h. describe the revaluation model;
What is the purpose of revaluation and why is it important?
The purpose of a revaluation is to bring into the books the fair market value of long-lived assets. The balance sheet is more informative when assets and liabilities are stated at market value rather than historical cost. IASB and some other non-U.S. GAAP do permit upward revaluations.