How to Add an Amount to the Value of an Existing Asset (Revaluation)
To increase the value of an asset that is already registered (such as adding improvements, an upgrade, or re-estimating its value), use a revaluation operation from the asset page. This is the only method that updates the asset’s current value, creates the accounting entry, and recalculates the upcoming depreciation on the new value.
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Warning: in the Value field, write the asset’s new total value, not the amount you want to add. For example: if the current value is 5,000 and you want to add 1,000, write 6,000.
Brief Workflow
1. Open the asset and find the current value → 2. Click Re-evaluate → 3. Enter the new value, the date, and the account → 4. Save and review the entry and the depreciation
The Steps in Detail
- Go to “Assets” and open the required asset.
- Note the current value shown on the asset page.
- Click the “Re-evaluate” button.
- In the revaluation information, enter:
- Value: the current value + the added amount.
- Date: the date of the addition (it cannot be before the last depreciation or operation recorded on the asset).
- Quantity: appears by default with the remaining quantity of the asset.
- Account: the offsetting account for the increase, such as the treasury or bank account if you paid the amount in cash, or the supplier account if it was on credit. If you leave it empty, the default account is used.
- Click “Save”.
What Happens After Saving?
| Effect | Details |
|---|---|
| The asset’s current value | Becomes the new value you entered, and the operation appears in the Asset Operations tab. |
| The accounting entry | An entry for the difference amount: debit the asset account, credit the account you chose. |
| Depreciation | Previous depreciation doesn’t change, and the upcoming depreciation is calculated on the new value. |
| The asset status | Becomes In Service, even if the asset was fully depreciated before. |
Practical example
A computer whose current value is 5,000, and you added memory and a storage disk to it at a cost of 1,000 that you paid from the treasury:
- Revaluation: value = 6,000, account = the treasury.
- The entry: debit the asset account (the computer) 1,000 / credit the treasury 1,000.
- If the depreciation is 20% annually, the upcoming depreciation is calculated on 6,000 instead of 5,000. But if the depreciation is a fixed amount, the amount stays as it is and the depreciation continues for longer periods until the value reaches the salvage value.
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Warning: if you leave the account empty, the credit side is recorded in the default revaluation account found under other expenses. If the increase was actually paid, choose the treasury, bank, or supplier account so the entry is correct.
Why Isn’t a Manual Journal Entry Enough?
You can create a manual journal entry on the asset account, and the account’s balance will change in the general accounts, but the current value on the asset page won’t change, and the depreciation won’t be calculated on the added amount, so the asset page will differ from the accounts. So use revaluation.
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Note: a purchase invoice or an expense cannot be linked to an existing asset to increase its value. If you recorded the cost as an expense or a purchase invoice, don’t repeat the amount in the revaluation on the same account so that it isn’t recorded twice.
Editing or Deleting the Revaluation
From the Asset Operations tab you can edit the operation or delete it, provided there are no other operations or depreciations after it. When it is deleted, the current value goes back to what it was before the operation.
Frequently Asked Questions
- Can the asset’s value be reduced in the same way? Yes, enter a value lower than the current value, and a reversed entry is created for the difference amount.
- Why can’t I edit the purchase price from editing the asset? After depreciation or operations have been recorded on the asset, editing the purchase data is locked, and the message “There are previous movements for the asset” appears. Use revaluation instead.
- A date error message appeared. What do I do? The revaluation date must be after the last depreciation or operation recorded on the asset, and it cannot fall in a closed accounting period.