🎯 Purpose of Revaluation

Revaluation of tangible assets is a strategic exercise aimed at aligning asset values with their actual performance, service potential, and economic utility. It requires clear justification, selection of appropriate valuation methods, and often, cross-verification between multiple approaches to ensure accuracy and transparency.

⚙️ Asset Performance as a Valuation Driver

Maintenance and valuation must be viewed through the lens of service delivery. Tangible assets should be assessed based on:

• Physical condition and structural integrity
• Functional capability and operational readiness
• Capacity to meet demand
• Environmental performance and compliance
• Alignment with current and projected service requirements

🏛️ Revaluation Context: Public vs Private Sector

The rationale for revaluation varies depending on whether the asset belongs to a public institution or a private enterprise. Public sector revaluations often focus on transparency, accountability, and regulatory compliance. Private sector revaluations may prioritize financial reporting, investment decisions, or merger and acquisition readiness.

📋 Preliminary Considerations

Revaluation is a multidisciplinary effort requiring coordination between:

• Production and Operations teams
• Finance and Accounting departments
• Technical and Engineering units
• External appraisers and valuation experts

Before commissioning the project, stakeholders must define clear objectives, scope, and methodology to guide the process.

📐 Methods of Revaluation

The chosen depreciation method should reflect how the asset’s economic benefits are consumed. Common approaches include:

• Straight-line depreciation: Assumes uniform consumption over time
• Declining balance method: Reflects accelerated wear or obsolescence
• Units of production: Tied to actual usage or output

Depreciation methods must be reviewed regularly. If the consumption pattern changes, the method should be adjusted prospectively to maintain financial accuracy.