Blockware Corporation has selected to use the revaluation model for its assets. Recently it had its building appraised. The appraiser placed a $5,000,000 value on the building. Back in 2017 this building was purchased for $4,000,000. This increase in value over cost requires a:

Question

Quizplus · Accepted Answer

According to the revaluation model, when the fair value of an asset increases above its carrying amount (cost less accumulated depreciation), the difference is credited to a revaluation surplus account. Therefore, the correct choice is to credit the revaluation surplus account, as the building has increased in value.

Blockware Corporation Has Selected to Use the Revaluation Model for Its