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Revaluation

Adjusting Asset Value to Reflect Current Market or Fair Value

The Revaluation feature in PrismERP allows organizations to adjust the book value of their assets to reflect their current market or fair value. This process is essential for ensuring that financial statements present a true and fair view of an organization's assets, especially in accordance with international accounting standards such as IFRS or GAAP.

Revaluation is commonly applied to fixed assets such as buildings, machinery, or land, but can also be extended to currency revaluation and other financial instruments. It ensures that assets are neither overstated nor understated in the books, helping maintain financial accuracy and compliance.

What is Revaluation?​

Revaluation is the process of increasing or decreasing the carrying amount of an asset to bring it in line with its current market value. It is used to account for depreciation, appreciation, or market changes that affect the worth of the asset over time.

When to Use Revaluation​

  • When an asset has appreciated in value and needs to be reflected in the balance sheet
  • When asset values have declined significantly and impairment is required
  • During periodic financial audits or reporting cycles
  • For compliance with updated accounting standards
  • For foreign currency transactions involving revaluation due to exchange rate fluctuations

Key Features of Revaluation in PrismERP​

  • Asset Revaluation Module Perform revaluation on individual assets or entire asset classes.

  • Automated Journal Entries Automatically generate accounting entries to reflect gain or loss from revaluation.

  • Support for Multiple Revaluation Types Includes fixed asset revaluation, foreign currency revaluation, and inventory revaluation.

  • Date-Specific Revaluation Apply revaluation based on selected financial periods or audit dates.

  • Audit Trail and Logs Maintain a full history of revaluation events with user, date, amount, and justification.

  • Compliant Reporting Align with international accounting standards and generate relevant reports.

  • Integration with Fixed Assets Module Automatically updates asset values, depreciation schedules, and ledger balances.

Integrated Modules​

  • Fixed Asset Management
  • General Ledger
  • Financial Reporting
  • Depreciation Management
  • Currency Management (for FX Revaluation)

Enhance Financial Accuracy with Revaluation in PrismERP​

With PrismERP’s Revaluation feature, your organization can ensure its financial records remain relevant, accurate, and compliant—providing stakeholders with confidence in reported asset values and maintaining the integrity of financial statements.

Asset Category​

1) Adding a New Asset Category​

Navigation Asset New Asset Category

An asset category defines the characteristics of an asset added to the application. Categorization helps in organizing items or products under specific asset groups.

Required Fields for Creating an Asset Category:​

  • Type: Defines whether the asset is tangible or intangible.
  • Name: Name of the asset category.
  • Depreciation Model: Specifies the depreciation method (cost model or revaluation model).
  • Depreciation Account: Defines under which depreciation account the asset category falls.
  • Depreciation Rate (Year): The annual percentage of depreciation for the asset category.
  • Depreciation Pulse: Frequency of depreciation (monthly, yearly, quarterly, half-yearly).
  • Account Code: Specifies under which asset account the asset category is listed.
  • Depreciation Policy: Defines the depreciation method (Straight Line Method or Reducing Balance Method).
  • Life (Tax): Tax-related depreciation for assets such as vehicles (optional).
  • Life (MIS): Optional field for Management Information Systems (MIS) tracking.

2) Asset Category List​

The asset category list displays all asset categories created within the application.

Key Features:​

  • Left Panel: Displays a list of all created asset categories.
  • Right Panel: Shows basic details related to a specific asset category.
  • Adding New Categories: Click the “+” icon beside the Asset Category heading to add a new category.
  • Editing an Asset Category: Click the edit option in the top-right corner to modify any asset category.

This module ensures streamlined categorization and tracking of assets within the organization.