revaluation provision

an accounting PROVISION made for the increased cost of replacing a FIXED ASSET, over and above its HISTORIC COST DEPRECIATION charges spread the original cost of a fixed asset over its estimated life, preventing the cost of the asset from being ignored in calculating net profit and so preventing the firm's LONG-TERM CAPITAL EMPLOYED from being distributed as DIVIDENDS. However, where the REPLACEMENT COST of a fixed asset is expected to exceed its original cost, a prudent firm may withhold additional profits instead of distributing them, in anticipation of having to pay this additional sum. See INFLATION ACCOUNTING.

单词	revaluation provision
释义	revaluation provision revaluation provision an accounting PROVISION made for the increased cost of replacing a FIXED ASSET, over and above its HISTORIC COST DEPRECIATION charges spread the original cost of a fixed asset over its estimated life, preventing the cost of the asset from being ignored in calculating net profit and so preventing the firm's LONG-TERM CAPITAL EMPLOYED from being distributed as DIVIDENDS. However, where the REPLACEMENT COST of a fixed asset is expected to exceed its original cost, a prudent firm may withhold additional profits instead of distributing them, in anticipation of having to pay this additional sum. See INFLATION ACCOUNTING.
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