Revaluation of fixed assets

Have you ever had a toy that you played with for a long time and it got a little bit worn out? Maybe it was no longer worth as much money as it was when you first got it? That's kind of like what happens with big things that companies own, called fixed assets, like buildings or land.

When a company buys a fixed asset, they say how much it's worth on their financial statements. But sometimes after a few years, that asset could be worth more or less than what they originally said it was worth.

So, revaluation of fixed assets is when a company looks at its fixed assets and figures out how much they're worth now. This helps them to have a more accurate picture of their financial situation.

For example, let's say a company bought a piece of land for $100,000 many years ago. But now, because the area where the land is located has developed and become more valuable, that same piece of land might now be worth $200,000.

So, if the company decides to revalue their fixed assets, they would update the value of that land from $100,000 to $200,000. This helps the company to have a clearer understanding of what their overall assets are worth and how much they could sell them for if they needed to.