ACCA Financial Reporting (F7) Practice Exam 2026 – Complete Prep Guide

A company can revalue its assets when it meets the fair value requirement. This means that the company must determine the fair value of the asset reliably, which is defined as the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date. Fair value measurements rely on market-based evidence or involve other valuation techniques that can provide a reasonable estimation of the asset's current value.

Meeting the fair value requirement is crucial because it ensures that the revaluation reflects an accurate and realistic assessment of the asset's worth. If the fair value cannot be reliably measured, then revaluation is not permitted, regardless of other conditions such as changes in market value or economic factors.

The other conditions listed, while they may influence the company's decision to revalue, do not inherently meet the accounting standards for asset revaluation set by applicable financial reporting frameworks. Therefore, the requirement to assess fair value provides the necessary foundation for an appropriate revaluation process.