A revaluation surplus is recognised in equity as part of the revaluation surplus when it happens how?

• A. In equity as part of revaluation surplus
• B. In profit or loss
• C. In cash flow
• D. In non-current liabilities

Answer: (A)

When a non-current asset is increased in value under the revaluation model, the gain is recorded in equity as a revaluation surplus. This reflects that the increase is not yet realized through sale and does not affect profit or loss. The revaluation surplus sits within equity as a separate component, staying there until the asset is disposed of or until any future adjustments require changes (with reversals from previous downward movements potentially moving amounts into profit or loss to the extent of those reversals).