Final answer:
The difference between the fair value and net book value when the former is higher is credited to Shareholder's equity, specifically to a revaluation surplus account as part of other comprehensive income.
Step-by-step explanation:
When the fair value (FV) is above the net book value of an asset, the difference flows into c) Shareholder's equity. This accounting practice is part of the revaluation of fixed assets, where an increase in the value of an asset is recognized. The increase is generally credited to a revaluation surplus within equity, which is a part of other comprehensive income. It is not recognized in the income statement because it is an unrealized gain, and it does not affect the accumulated depreciation directly at the time of revaluation. It is also not a cash flow and hence does not appear on the cash flow statement.