what is revaluation reserve 
revaluation reserve is an accounting term used when a company creates a line item on its balance sheet for the purpose of maintaining a reserve account tied to certain assets this line item can be used when a revaluation assessment finds that the carrying value of the asset has changed understanding revaluation reservecompanies have the flexibility to create line items for reserves on the balance sheet when they feel it is necessary for proper accounting presentation companies may use reserves for various reasons including asset revaluation like most reserve line items the revaluation reserve amount either increases or decreases the total value of balance sheet assets revaluation reserves are not necessarily common but they can be used when a company believes the value of certain assets will fluctuate beyond established schedules the standard procedure for identifying the carrying value of assets on the balance sheet involves marking assets down over time on a scheduled basis usually based on a depreciation schedule in general revaluation reserves increase or decrease the carrying value of the asset based on estimates of its fair value companies may establish a revaluation reserve if they believe an asset s carrying value needs to be more closely monitored and assessed due to certain market situations such as real estate assets that are increasing in market value or foreign assets that are fluctuating due to currency changes a company can add to or subtract from the revaluation reserve throughout the year without waiting for monthly or quarterly scheduled adjustments this line item helps to keep value more accurate through day to day activities companies may use reserve lines in place of or in association with write downs or impairments write downs and impairments are usually a one time expense charge due to an unexpected decrease in the value of a long term asset recording revaluation reservesthe revaluation reserve refers to the specific line item adjustment required when the revaluation of an asset takes place in most cases the reserve line either increases a liability or reduces the value of an asset 