IGCSEAccountingCambridge (CIE)Revision Notes4. Accounting ProceduresDepreciation & Disposal of Non-Current AssetsRevaluation Method of Depreciation

Syllabus Edition

First teaching 2025

First exams 2027

Revaluation Method of Depreciation (Cambridge (CIE) IGCSE Accounting): Revision Note

Exam code: 0452 & 0985

Dan Finlay

Written by: Dan Finlay

Reviewed by: Lucy Kirkham

Updated on

Revaluation depreciation

What is the revaluation method of depreciation?

  • The revaluation method of depreciation involves performing a valuation of assets at the end of the financial year to determine the reduction in value

  • This method is commonly used for assets of smaller value

    • Such as loose tools, packing cases

A line graph showing the value of an asset which is being charged depreciation using the revaluation method
Example of an asset, which cost $20 000, being charged depreciation using the revaluation method each year

How do I calculate depreciation using the revaluation method?

  • A revaluation of the non-current asset will be given in the question

  • You need to identify two numbers:

    • The net book value before the revaluation

    • The net book value after the revaluation

  • The depreciation charge is the value before minus the value after

Worked Example

Abi purchased fixtures and fittings for $5 000 on 1 March 2023. On 29 February 2024, at the end of the financial year, the fixtures and fittings were valued at $3 650.

Calculate the depreciation charged for the financial year ending on 29 February 2024.

Answer:

  • Value before the revaluation is $5 000

  • Value after the revaluation is $3 650

  • Calculate the difference

$5 000 - $3 650 = $1 350

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    Author
    Reviewer
    Dan Finlay

    Author: Dan Finlay

    Expertise: Maths Subject Lead

    Dan graduated from the University of Oxford with a First class degree in mathematics. As well as teaching maths for over 8 years, Dan has marked a range of exams for Edexcel, tutored students and taught A Level Accounting. Dan has a keen interest in statistics and probability and their real-life applications.

    Lucy Kirkham

    Reviewer: Lucy Kirkham

    Expertise: Head of Content Creation

    Lucy has been a passionate Maths teacher for over 12 years, teaching maths across the UK and abroad helping to engage, interest and develop confidence in the subject at all levels.Working as a Head of Department and then Director of Maths, Lucy has advised schools and academy trusts in both Scotland and the East Midlands, where her role was to support and coach teachers to improve Maths teaching for all.