Remeasurement

A A A

DEFINITION

The re-evaluation of the value of an asset or liability within a particular account on a company's financial statements. The purpose of this re-evaluation is to more accurately reflect the company's financial and operating position, even if the re-evaluation doesn't benefit the firm.

INVESTOPEDIA EXPLAINS

Remeasurement is not a new concept, but it is becoming more and more common. The most common remeasurement takes place within a company's long-term assets section under the firm's balance sheet, most notably in the "land" account.

Land often appreciates with time, and a company must show this appreciation as an adjusting entry under an account named "modified historical cost", or "mixed measurement system."


RELATED TERMS
  1. Accounting

    The systematic and comprehensive recording of financial transactions pertaining ...
  2. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities and shareholders' ...
  3. Appreciation

    An increase in the value of an asset over time. The increase can occur for a ...
  4. Asset

    1. A resource with economic value that an individual, corporation or country ...
  5. Asset Valuation

    A method of assessing the worth of a company, real property, security, antique ...
  6. Long-Term Assets

    1. The value of a company's property, equipment and other capital assets, minus ...
  7. Working Capital

    This ratio indicates whether a company has enough short term assets to cover ...
  8. Amortization

    1. The paying off of debt in regular installments over a period of time. 2. ...
  9. Price-To-Cash-Flow Ratio

    The ratio of a stock’s price to its cash flow per share. The price-to-cash-flow ...
  10. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. ...
Related Articles
  1. Reading The Balance Sheet
    Investing Basics

    Reading The Balance Sheet

  2. Off-Balance-Sheet Entities: An Introduction
    Investing

    Off-Balance-Sheet Entities: An Introduction

  3. What's the difference between book and ...
    Investing

    What's the difference between book and ...

  4. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

  5. Top 8 Ways Companies Cook The Books
    Personal Finance

    Top 8 Ways Companies Cook The Books

  6. How Return On Equity Can Help You Find ...
    Economics

    How Return On Equity Can Help You Find ...

  7. 4 Leverage Ratios Used In Evaluating ...
    Fundamental Analysis

    4 Leverage Ratios Used In Evaluating ...

  8. How Does Goodwill Affect Stock Prices?
    Investing Basics

    How Does Goodwill Affect Stock Prices?

  9. Why is it sometimes better to use an ...
    Investing Basics

    Why is it sometimes better to use an ...

  10. How do you calculate working capital?
    Investing Basics

    How do you calculate working capital?

comments powered by Disqus
Hot Definitions
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  2. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  3. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  4. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  5. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  6. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
Trading Center