An increase in the asset's value should not be reported on the income statement; instead an equity account is credited called “Revaluation Surplus. ” Revaluation surplus is reported in the other comprehensive income sub-section of the owner's equity section in the balance sheet.

Where is revaluation gain recorded?

Where an asset's carrying amount is increased as a result of a revaluation (ie a revaluation gain), this gain is normally recognised in other comprehensive income and accumulated in equity under the heading of revaluation surplus.

Where is revaluation on balance sheet?

If the asset decreases in value, the revaluation reserve is credited on the balance sheet to decrease the carrying value of the asset, and the expense is debited to increase total revaluation expense.