Under U.S. GAAP, assets must be carried at historical cost, less any charges for depreciation, amortization and impairment. Under no circumstances can assets be revalued to a higher value.
International Standards permit upward revaluation of assets if the fair value of the assets increases. Typically the new value is based on an appraisal.
Upward revaluations can affect comparisons between companies that have revalued and those that have not. Further, upward revaluation results in more favorable leverage and solvency ratios. As a result, investors may wish to adjust the financial statements to remove the impact of upward revaluation.