Upward revaluation credits revaluation reserve Steps:

• Calculate current carrying amount: historical cost minus accumulated depreciation.
• Determine new fair value, which exceeds carrying amount for upward revaluation.
• Eliminate accumulated depreciation against gross carrying amount of the asset.
• Credit the net revaluation gain to revaluation reserve in equity; capital reserve unchanged.

Why D is correct:

• IAS 16 requires revaluation increases to be recognized in other comprehensive income and accumulated in the revaluation surplus (reserve).

Why the others are wrong:

• A: Capital reserve unaffected; gain goes to revaluation reserve, not capital reserve.
• B: No decrease in capital reserve; revaluation reserve increases, not unaffected.
• C: Revaluation reserve increases for upward adjustment, not decreases.

Final answer: D