Revaluation of property to current value under the revaluation model Steps: - Calculate carrying amount: historical cost $80,000 minus accumulated depreciation$25,000 = $55,000. - Determine revaluation surplus: current value$100,000 minus carrying amount $55,000 =$45,000 increase. - Eliminate accumulated depreciation against gross carrying amount: debit provision for depreciation $25,000, credit non-current asset$25,000 (net asset unchanged at $55,000). - Restate net asset to revalued amount: debit non-current asset$45,000, credit revaluation reserve $45,000 (net effect: debit non-current asset$20,000, credit revaluation reserve $45,000 after elimination). Why D is correct: - IAS 16 requires revaluation increases to be credited to revaluation reserve (other comprehensive income), not profit or loss, unless reversing a prior decrease; the$20,000 reflects the net adjustment to historical cost after depreciation elimination. Why the others are wrong: - A: Credits revaluation gain to statement of profit or loss, violating IAS 16 which routes it to revaluation reserve. - B: Involves provision adjustment and profit or loss credit, but revaluation does not affect profit or loss and entry is unbalanced. - C: Uses $45,000 increase but …