Revaluation Reserve
Definition
A reserve recording the increase in the carrying value of an asset when it is revalued upward. It is part of equity and is not a realised profit until the asset is sold.
Related Terms in Core Accounting
Depreciation vs Amortization
Both spread an asset's cost over its useful life, but depreciation applies to tangible assets like equipment, while amortization applies to intangible assets like patents and to loan principal repayment.
Carriage Inward and Outward
Carriage inward is the freight cost of bringing purchases into the business, added to the cost of goods; carriage outward is the cost of delivering goods to customers, treated as a selling expense.
Bank Reconciliation Statement (BRS)
A statement reconciling the balance in a business's cash book with the balance on its bank statement, explaining differences such as unpresented cheques, deposits in transit and bank charges.
Closing Stock
The value of unsold inventory at the end of an accounting period. It reduces the cost of goods sold for the period and is carried forward as the opening stock of the next.
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