This matches any increase in the value of land, or property, held by a business over the original purchase price. Revaluation reserves are created by directors when fixed assets are revalued upwards. As stated above, land and buildings were purchased for £2m, but at some later point they were revalued at £3.5m. The revaluation reserve balances the account. It is classed as a capital reserve (rather than a revenue reserve), and is not available to pay out as dividend.