There is one thing that makes a difference: A right to receive or obligation to deliver a fixed or determinable number of units of currency. ... Therefore, your prepayment for a machine is (in most cases) a non-monetary item and as a result, you should NOT recalculate it using the closing rate at the year-end.

Which accounts should be revalued?

The general rule (and, again, please check with your accountants) is that any asset or liability that you expect to settle within a set amount of time (such as payables and receivables) should be revalued to the income statement.

Is prepayment monetary asset?

the prepayment asset or deferred income liability is non-monetary.