Final answer:
When revaluating an asset, the asset's new valuation and depreciation schedule must be re-estimated, and any revaluation surplus should be accounted for appropriately in equity or profit or loss, depending on whether it reverses a previous decrease.
Step-by-step explanation:
On revaluation of an asset, it is not only the carrying amount of the asset that should be re-estimated. Besides the asset's new valuation, the depreciation schedule should also be revised. For example, depreciation expense is recalculated based on the new value of the asset and the remaining useful life. This step ensures that the revised value is systematically allocated over its remaining useful life. Additionally, any revaluation surplus should be recorded directly in equity under revaluation surplus, unless it reverses a revaluation decrease of the same asset previously recognized in profit or loss, in which case it should be recognized in profit or loss.