Over time, your business will experience ups and downs and developments. Especially if your business has been running for many years. This of course has an impact on the value of assets related to the business you are in.
For this reason, it is necessary to evaluate the fixed assets owned by the company or referred to as asset revaluation. The company’s decision to revaluate assets is a form of awareness as a citizen. In addition, the benefits are also directly related to the taxation aspect.
By revaluing assets, the company will better understand the company’s current financial condition. For example, the nominal value of an asset in the form of land purchased 10 years ago would have experienced a significant price increase in the present.
This increase in the nominal value of assets allows the company to apply for additional debt to the bank. In other words, your business can grow.
In line with use, in general, fixed assets experience depreciation. For example, assets in the form of buildings or buildings whose value decreases due to continuous use. Depreciation of assets is influenced by several factors such as cost, residual value, the economic life of assets, and calculation of depreciation expense.
The acquisition price is the amount of money spent by the company to acquire fixed assets until the assets are ready to be used to support your business. Residual value is an estimate of the potential cash that will enter the company if the asset is withdrawn or retired.
Meanwhile, the economic life of assets is divided into physical life and functional life. Physical age is related to whether or not the condition of an asset is good, even though the asset has experienced a decline in function.
The calculation of depreciation of assets is generally done using the straight-line method. The greater the depreciation value of the asset, the less tax you deposit.
Asset revaluation aims to give real value to the assets owned by the company. In other words, asset revaluation makes the value of fixed assets written in the company’s financial statements fair.
This kind of thing is very useful if your company is interested or has even gone public because the asset value has a realistic nominal. In addition, the increase in asset value after asset revaluation can be written as additional share value.
The main purpose of asset revaluation is to provide a true value to the company’s assets.
Asset management activities such as asset revaluation and recording many depreciations on each asset will be easier for you to do if you use reliable fixed asset valuation services of CAC.
We suggest you turn to the expert team of CAC which provides the best services for managing fixed assets and inventory of your business, regardless of the field you work in. The professionals of this firm are highly experienced and helpful and give an honest review about a company’s condition, moreover, they also help such companies with their business advisory services.