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Revaluation reserve


The 1981 Companies Act provided that where assets are revalued by application of the alternative accounting rules, then any surplus on revaluation must be shown as a separate figure in the accounts. This surplus need not be described as a revaluation reserve but it must be retained as such and is subject to certain regulations. These are, inter alia, that it cannot be reduced except where the value of the assets which gave it birth are themselves reduced and it cannot be distributed unless those assets are realized.

Reference: The Penguin Business Dictionary , 3rd edt.