Revaluation

Reviewed by Komal | Updated on Aug 26, 2020

Introduction

Revaluation is an upward adjustment to the value of assets, goods or especially the currency from a chosen baseline. It is opposite of devaluation, which means downward adjustment.

A revaluation of currency can occur on a regular basis, due to the significant fluctuations in the foreign currency market and other associated exchange rates. The currency revaluation can also affect the values of the assets held by the companies in a country. The book values of the assets might have to be adjusted to reflect the impact of the revalued currency rate.

Understanding Revaluation

In the country where the fixed exchange rate regime is followed, the judgement by a country's government, such as its central bank, can modify the official value of the currency.

Some of the common causes of revaluation can be changes in the interest rates between various countries, large scale events that affect the profitability of the economy.

Changes in the government can also trigger a change in a particular market's stability.