Write-Up Adjustment of Asset's Book Value: Meaning and Example

A write-up adjustment of an asset’s book value is an upward revision to the carrying amount of an asset on the books. It usually reflects a permitted revaluation framework, an acquisition accounting adjustment, or another reporting rule that allows the asset to be marked higher than before.

How It Works

A write-up affects both the asset side of the balance sheet and, depending on the accounting framework, equity or gain recognition. It is different from normal depreciation schedules because it moves the carrying amount upward rather than downward.

Worked Example

If a property previously carried at $4 million is revalued to $5 million under an allowed accounting framework, the company records a $1 million write-up adjustment.

Scenario Question

An investor says, “A write-up automatically creates cash for the business.”

Answer: No. It changes accounting values, not immediate cash flow.

Related Terms

• Book Value: A write-up changes book value by changing carrying amounts.
• Market Value: Write-ups are often motivated by a gap between carrying value and estimated market value.
• Balance Sheet: The effect of a write-up appears on the balance sheet.